Definition: Corporate banking is the tailor-made financial services that financial institutions offer to corporations in the context of corporate financing and raise capital.
What Does Corporate Banking Mean?
What is the definition of corporate banking? Typically, corporate banking is a specialized division of a commercial bank that offers various banking solutions, such as credit management, asset management, cash management, and underwriting to large corporations as well as to small and medium-sized enterprises (SMEs).
Commercial banks focus on business banking as it is one of their major sources of profit and assign specialized finance professionals, able to assist corporations to meet their business objectives. Unlike what many people think, business banking is completely different than investment banking; however, the terms are often used interchangeably.
Let’s look at an example.
Example
Jonathan works in the business banking division of Wells Fargo. He is responsible for small and medium-size enterprises, but he is also trusted with a couple of large organizations. Most of his tasks include the offering of loans and credit services and meeting with corporate clients to see what are their financial requirements and how could he be of any assistance.
However, Jonathan’s expertise is the Leveraged Buyout Models (LBO) and advising corporate clients on mergers and acquisitions. Moreover, the industries that he is most familiar with are the healthcare, and the technology industry, thus he develops specialized products that can meet his clients’ needs.
Jonathan is highly responsible, and he has an impressive way of promoting the suitable banking solution for every corporate problem. His manager is so satisfied with Jonathan’s performance that he asked him to get involved in the lending agreements as well. Although the stress levels are often too high at business banking, Jonathan is used to working very long hours and consistently delivering high-quality services. In fact, last year he was awarded the best employee at promoting the bank services trophy.
Summary Definition
Define Corporate Banking: Business banking means the services that banks offer to their corporate clients.
