What is Corporate banking? Whats are the Products and Services of Corporate Banking?

Posted by Muhammad Jakirul Haque Talukder on Wednesday, May 27, 2015 | 0 comments


Corporate banking
Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers. The term was originally used in the U.S. to distinguish it from investment banking, after the Glass-Steagall Act of 1933 separated the two activities. While the Act was repealed in the 1990s, corporate banking and investment banking services have been offered for many years under the same umbrella by most banks in the U.S. and elsewhere. Corporate banking is a key profit center for most banks; however, as the biggest originator of customer loans, it is also the source of regular write-downs for loans that have soured.

The corporate banking segment of banks typically serves a diverse range of clients, ranging from small to mid-sized local businesses with a few millions in revenues to large conglomerates with billions in sales and offices across the country.

Products and Services of Corporate Banking

  • Loans and other credit products – this is typically the biggest area of business within corporate banking, and as noted earlier, one of the biggest sources of profit and risk for a bank.
  • Treasury and cash management services – used by companies for managing their working capital and currency conversion requirements.
  • Equipment lending – commercial banks structure customized loans and leases for a range of equipment used by companies in diverse sectors such as manufacturing, transportation and information technology.
  • Commercial real estate – services offered by banks in this area include real asset analysis, portfolio evaluation, debt and equity structuring.
  • Trade finance – involves letters of credit, bill collection, and factoring.
  • Employer services – services such as payroll and group retirement plans are typically offered by specialized affiliates of a bank.

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