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Tag: course on investment banking

Investment Banking Business Model and Financial Stability

Posted on by Imarticus Learning

Investment banking is the clear winner when it comes to advisory and mediation roles. It takes care of investing from end to end, by assessing the risk and evaluating the flow of credit.
Not only do they cater to private investors, but also to large and small companies alike, and also to governmental organizations. With so much to offer, how does investment banking generate revenue and profit? How does an investment bank thrive? This article attempts to answer these questions by taking a look at the business or financial model of investment banks and their methods for financial stability.
Financial modeling is crucial during decision-making. The prices are decided by the financial model. Previous trends are analyzed, changes are incorporated, and future trends are predicted. These are important data points that aid in making the right decisions. Financial modeling helps investment bankers in equity research and credit ratings. The models are used to analyze the value of a company, thereby deciding whether to go for a merger or an acquisition. Companies use the financial model to assess their standing and growth.

Investment banks receive a commission for all the successful transactions they make between agreeing parties. The bigger the deal, the more they earn! They earn money through trading by employing traders to invest in shares and derivatives. The banks also receive asset management fees from their clients for evaluating and protecting their assets. For all the advisory and compliance roles, the banks charge the corresponding service fees. Investment banks generate revenue from dividends too. They receive income for underwriting stocks and bonds. Investment banks spend a huge chunk of their resources on research and analysis. Once through research is done and reports are generated, the important data and insights are sold to hedge funds and mutual funds managers.
Some investment banks also generate revenue by performing wealth management roles.
There are a few business models in investment banking that can be used during turbulent times, for higher performance. These are :
Flow Monster: This business model demands competitive pricing, strong sales relationships, high-quality research, and highly efficient technology.
Product Specialist: Holds conviction to a particular product or technology or type of trade. Here, the product managers must be fully knowledgeable about the product and what differentiates them.
Risk Master: This business model tries to ace risk assessment and management. Calculated and intelligent risks are taken. It is not a common model but is quite successful.
To enhance and optimize their business models, investment banks can try to focus on client-centric initiatives. Smooth onboarding and regulatory checks are generally expected. Simplifying the IT infrastructure, reducing overheads helps in reducing operational costs. Investment banks can invest in financial technologies to help overcome technological glitches and improve stability. Often ignored is the organizational structure in investment banks. By changing the internal culture and hierarchy, sometimes a lot can be achieved. Having said that, maintaining standard procedures is equally important.
These are areas where the banks can work on to maximize efficiency and maintain financial stability.
Financial technology plays a major role in investment banking. Currently, there is no unified structure for all the technologies used. They are diverse and heavily layered, which increases the complexity of regulation. Cybersecurity is a major challenge for the banking sector. Commonly suggested, is the two-factor authentication method for verification of identity.
Financial engineering requirements sometimes determine the success of banking. A flexible model that evolves with the ever growing and changing technology, that is more adaptable is the need of the hour for Investment Banking Courses and business models. It is generally suggested that the banks spend considerable resources on strategy and optimization to avoid bad transactions and financial instability. To turn around investment banking, some fundamental, yet simple transformations are required. And finally, investment banks need to address the disruptors and attackers of the economy, so as to adapt to changing ecosystems and maintaining a resilient system.

Outrageously Simple Investment Banking Tips

Posted on by Imarticus Learning

 

Investment banking is a particular division of banking which is associated with capital making for enterprises, government, and bank support in compound financial transactions. In simple words, investment banking meaning pertains to a bank helping public and private companies gather funds in both the equity as well as debt capital markets. These investment banks were actually founded to raise the required capitals and also to offer guidance on different financial strategies for corporate sectors.

However, when you venture into the field of investment banking, the scenario may demand many strategies to be put in the right place to become successful. You may have taken many investment banking courses but the real battle begins when you actually start the job. This is the time when you actually realize completely what is investment banking?

Well, here are certain tips that can assist you in succeeding in the area. These tips will make the job easier for you and will definitely give you an edge over other candidates in the field.

Be Adaptable

As per Graham Ward, who has been the former head of equities at Goldman Sachs and is now at the post of adjunct professor of leadership at INSEAD, if you are aware of the kind of personalities that major financial institutions are looking at, you can ensure a long-term investment banking career for yourself. Moreover, you need to be a team player who understands all the requisites of investment banking. In addition, you need to be flexible enough to learn to adapt to the continuous changes in investment banking scenarios.

Persistence is the Key

Just understanding what is investment banking is not enough to be successful in the field. You need to be smart, with an added edge of possessing hard determination and a clear focus. Try to compensate for the area where you lack in brains with high levels of energy. In short, you need to be enthusiastic, energetic, dogged, and persistent to be successful.

Always be aware of the competition

A successful investment banker needs to continuously think of different ways in which he can add value during his or her interactions with the clients. This implies that you need to be informed about the different aspects of investment banking even more than the so-called investment banking experts. Read everything related to your specified coverage area as well as your clients. This requires extreme discipline and you need to go through your client company’s newsletters, reports and even about their shareholders. Also, try to read between the lines and make your own assessments about the company. Moreover, it will not be a drawback if you ask questions about what you do not understand about the said client company.

Taking career risks is imperative

Investment banking career path is not always a smooth one. The investment banking avenues neither stay in one location nor in just one sector. You as an investment banker need to take up the opportunities as they appear. You need to be open-minded and flexible enough to take up new investment banking opportunities. You can enroll in investment banking courses. This will help you understand the investment banking meaning in a better sense.

Consistency is the key

The job of an investment banker is not an easy one. As you rise up in position, the pressure increases. However, your consistency will help you in remaining cool minded when you reach a top position. Moreover, consistency will assist you in handling the huge amounts of revenues that you are expected to generate every year.

 Dressing Sense Makes a Major Impact

Though this sounds a little strange, it is a fact that being dressed properly makes an impact on your clients. It is also a common fact that many clients turn down the investment bankers who were dressed shabbily. Thus, it is highly imperative to be dressed properly when you are going for a deal.

Deutsche Bank Loses $1.6 Billion on Bonds

Posted on by Imarticus Learning

 

Deutsche Bank is amidst the world’s top 50 financial institutions with its investments in BNP Paribas, Allianz, AXA, China Construction Bank and Berkshire Hathaway.  The loss faced by Deutsche Bank in its complex municipal bond investment which amounts to $1.6 Billion is one of the historical losses in the banking industry to date. Embattled banking institute Deutsche bank had to face a rough path in its investment on bonds of insurance of Warren Buffet’s Berkshire Hathaway.  

The story started in 2017 as a giant investment deal

These losses are a result of $7.8 Billion municipal bonds bought back in 2007 by the leading global investment German Deutsche Bank. According to The Wall Street Journal, the German lender had bought default protection on the bonds which led to paying $140 Million in the following year for a transaction. This scandal about Deutsche Bank hogged the limelight after The Wall Street Journal came up with this breaking news. It is to be noted that the German lender had previously refused to accept the depreciating rates of these bonds for years which the markets had suggested brushing aside the concerns of financial agents. 

Arising conflicts within the German bank executives

Though it has been a decade after a disastrous investment like this, the Deutsche Bank has not come out clean with regard to its scope of loses on the municipal bonds. The piling of the loss may probably be due to the negligence of the Deutsche bank in recognizing the loses earlier and the conflicts between the executives of the bank regarding the decision to invest in Berkshire Hathaway.

Financial auditors had raised doubt regarding the capabilities of the Deutsche bank to withstand the future loses due to such municipal bond investments earlier. However, the German lender had ignored such concerns about those related derivatives. Finally, after almost a decade the Deutsche Bank decided to offload these municipal bonds. Since the senior executives refuse to restate the happenings regarding the bonds the internal investigations had come to a halt. 

Ultimately Deutsche bank had decided to sell the municipal bonds for Berkshire insurance for a loss of $1.6 Billion in 2016. The debate among bank executives included whether they should have explained clearly about the wrong-path in this investment. But, later chose not to restate it.

This story has not come to an end

The Deutsche Bank spokesperson explained that this investment was unwinded in 2016 as part of winding up non-core operations. After the interrogation of auditors and external lawyers about the municipal bonds, it was clear that it accounted in line with the rules and regulations. However other journals predict that this deal may have to face interrogations from the investors and the people concerned and that the Deutsche Bank can expect another storm any time soon. Deutsche Bank is also in the news for rumours about its Russian money laundering. The bad decision behind the investment led to the Deutsche Bank dragging the decision to finally sell it off at huge losses. 

What Is In The Store For The Indian Markets in 2019?

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In 2019, the current Prime Minister of India, Mr Narendra Modi is scheduled to submit his application and woo a billion individuals of India for a second run as the ruling government. While pole predictions are on the way and experts predict that Modi will undoubtedly succeed in his attempt, there is another major event in global history which is scheduled to happen.

In Mid 2018, the World Bank is set to release a global list of nations GDP from across the world. While this seems uninteresting at first sight, experts predict that India is set to overcome and become the 5th largest nation in the world surpassing the UK.

While this might seem to be a rare coincidence, we can confidently say that political parties will not let go of this opportunity to show off their might and skills. But since the results are yet to be announced, experts are predicting the outcome based on previous data.

According to the latest estimates by the World Bank, the GDP or Gross Domestic Product of India was 15 billion USD bigger than the French economy in 2017. As of now, India is only behind, United States of America (USA), China, Japan, Germany and United Kingdom (UK) in terms of its economy, but this year this might change for the better.

While both China and the USA are multi-trillion dollar economies, the India of today is only a 2.6 trillion USD economy. Right after the recession and depression of 2010 to 2017, the UK has only seen a 2 per cent growth in its economy, while India has seen a staggering 7.5 per cent. If the economy of India continues to grow at the same rate even this year, the predictions will come true, and India will surpass UK in its overall GDP.

Although the ruling party might contest a narrative around this news, but the fact still remains that the living standards of the UK are too high for the average Indian to catch. As of 2017, the average income of a UK resident was $42,515 whereas that of her Indian counterparts was only $1,964.

While India may surely surpass the UK in the race for becoming the 5th largest economy in the world, it will take her some years to overtake that of Germany. As of now, Germany is the fourth largest economy in the world, with the World Bank pegging her at 4.7 trillion US Dollars.

Another announcement that is scheduled to take place is that of India becoming the fastest growing economy in the world this year. With a projected growth of more than 7.3 per cent over the past couple of years and a GDP growth of 7.6 per cent in the first quarter of 2018 to 2019.

As per the statistics available with the Central Statistics Office(CSO), the average per capita of Indians have increased from Rs. 86,647/- in 2014-15 to Rs 112,835/- in 2017-18, recording a 30.2 percent growth from 2014-15 to 2017-18.

With all this being said, we can confidently predict that this will be a year of growth for India as a country of billions.

Round Up of Global & India M.A. in 2018

Posted on by Imarticus Learning

 
2018 was a very eventful year for businesses across the globe and especially in India with mergers happening throughout the year and big names joining hands. The most significant of the many mergers and acquisitions that took place in India of 2018 have been processed for a long time and finally, in 2018 the deal was sealed and the mergers made official.
With that being said, in this article, we will take a closer look at all the mergers that took place and also talk about the most significant ones of the year. Let’s begin!
Flipkart and Walmart
We have all heard of Flipkart in India. Since its inception in 2007, Flipkart has become a household name for consumers across the nation for its deals, huge savings and especially Big Billion Day.
For the past couple of years, Flipkart had been struggling to keep their feet in the market after e-Commerce giant Amazon decided to step into the game and thus in 2018, Flipkart joined hands with one of the largest retailers in the world, Walmart. The deal between the giants was announced in May 2018, where Walmart will purchase a 77 per cent stake in the company. The deal which was finalized in August 2018 also included 2 billion USD in fresh funding to help Flipkart in its goal to become the biggest eCommerce retailer in India, surpassing Amazon.
Vodafone and Idea
In 2018 the Indian subsidiary of Vodafone Telecommunications Limited and Idea Telecommunications finally received a go-ahead on their merger from the National Company Law Tribunal or NCLT. The deal which was in works since last year finally was made public in August 2018, making it the biggest network with a subscriber base of 430 million. Companies representatives mentioned that this was a strategic move to fend off competitors like Airtel and Reliance Jio by holding a market stake of 37 per cent in the Indian Telecommunications space.
ONGC and HPCL
India is a country which is heavily dependent on Petroleum and natural gas produce. Both ONGC and HPCL are household names in the country and are the major suppliers of oil and natural gas to a country of millions. In January 2018, ONGC which is a partly owned Government organization announced its acquisition of 51 per cent stake in HPCL in an attempt to help the government meet its disinvestment target for 2017-2018.
ONGC shelled around 5.2 billion USD in its move to acquire a majority stake in the state-backed refinery, which was primarily funded by loans by debtors.
Tata Steel and Bhushan Steel
In May 2018, the steel conglomerate Tata submitted a winning bid of 4.2 billion USD to buy a 71 per cent stake in its bankrupt competitor Bhushan Steel. The announcement which got the approval of NCLT is a move to improve Tata’s domestic capacity and make inroads into the automotive steel, which was till now dominated by Bhushan Steel.
Conclusion
India is a fast-growing economy and thus the biggest mergers and acquisitions of 2018 have had a severe impact of growth on the economy of the country. Now in 2018, we are to see what new mergers and acquisitions take place.

What Technological Skills Are Needed For an Investment Banker?

Posted on by Imarticus Learning

 

An investment banker dons many hats every day. He needs to be well-equipped in the following technical skills and programming languages if he wants to remain successful. Like the rest of us, continued learning is just as crucial to the investment banker. Let us discuss these top technological skills for an investment banker.

Listed below are the top programming languages for technical skills for investment banking in use on Wall Street along with their advantages and disadvantages in no particular order.

 

  1. Java
     Oracle’s Java favors bank programming technology because of its security and capacity for loaded programs handling large volumes of data.

    It is very popular in banking because of its:
    • Powerful Security Manager.
    • Running runtime constraints
    • Support and portability to many OS

    The Java disadvantages are
    • Lower speed.
    • Lower productivity
    • Technology that consumes memory

  2. С
    C has impacted languages like Objective-C, C , C#, Java etc. The applications include databases, bank management platforms, advanced scientific programs, software for billing, and embedded systems among many more. C is widely used to program cash register terminals, point of sale (POS) devices, and POS console systems.

    Significant advantages:
    • Mid-level language
    • Maturity
    • High speed
    • Highly portable
    Some limitations are
    • The absence of reusable code.
    • Non-flexible in fixing bugs

  3. Python
    This programming language is simple and its syntax minimalistic. Its applications lie in machine learning, data analysis, the FinTech sphere, software industries, building cryptocurrency markets, insurance, banking, and many more.

    The popular features of Python are:
    • Scalability, consistency, simplicity.
    • Precise and fewer code lines.
    • Pythonic-standards applicability help to read, modify and maintain code with ease.
    • Powerful Django framework
    Despite benefits being many, the drawbacks are
    • No support for the web browser.
    • Design restrictions. Asynchronous capabilities limited by lock and single thread.

    4. C#
    Microsoft’s C# has a syntax similar to Can the best of Java and C. It is used for 3D-Unity games, building .NET programs, mobile apps, and websites.
    Developers favor C# for its:
    • Interoperability in Cross-languages.
    • C Enhancements.
    • Volumes of libraries.
    • Type safety
    • Uninitialized variables are not permitted, making C# coding safe.
    Its limitations are
    • Low speed
    • .NET dependency

    5. Ruby
    Ruby has the necessary characteristics and capabilities for rapid app development. Ruby combines features of Perl, Eifel, Ada, and Lisp besides others. It’s applications find use in financial technology, e-wallets, digital payments, analytics, and Big Data, and financial dashboards, and asset management systems.

    Startups and developers favor Ruby because it affords them
    • Time savings, efficiency, readily available plugins, third-party owned libraries and codeless apps for project development.
    • Ruby-on-Rails framework provides a bug-free secure code to build scalable apps.
    • Efficiency and cost saving
    The disadvantages are
    Tool Documentation is hard to find.
    Boot speed decrease due to the many libraries.

  4. C
    C programs are used in investment banking where speed in execution is crucial. It is popular for programs requiring advanced levels of computation where numerous operations are processed quickly, in quantitative analytics, and in quantitative finance.

    C is advantageous for its:
    • Code reusability
    • Speed and Efficiency.
    • Rich resource libraries.

    The drawbacks are:
    • Complexity.
    • Code writing and insecurity.

    In conclusion, do investment banking courses to gain these technical skills. Each of these has its drawbacks and super advantages. The investment banker’s role is very trying and proficiency in these technical skills can alleviate some of the pressures. Check out these courses as a package or individual courses to attain practical skills so vital to your job role in investment banking.

Also Read: How to Become Investment Banker

Are Investment Bankers Able to Run Commercial Banking Operations?

Posted on by Imarticus Learning

 

The answer to this question lies in understanding why commercial banking and investment banking have different roles to play in the banking sector. Commercial banking is customer-facing and deposit oriented. Investment banking, on the other hand, is similar to brokering deals between willing investors and companies that need investments and offer good growth. Your skill sets for each operation are different and may require different technological enablement.

Commercial banks:
 In a commercial bank, the deposit accepted from retail customers and the general public offer the banks a good investment capacity. Rather than hold on to the funds, banks invest in growing companies with guaranteed returns, government bonds and loans etc. When the income they earn from such investments is greater than what they pay their depositors as interest is higher the bank is successful.

Investment Banking:
 The investment banker is essentially a broker between the bank, the investors and finance-seeking clients, of investment services like IPO’s, asset management, mergers, underwriting, acquisitions, shares, trading, securities, and bonds. The brokerage earned from such financial transactions made on such advice is pure profit. There is no depositing of funds by the investors in the investment banking section. Investment banking is popular today to the large group of investors who have surplus cash and wish to earn well from it. Angel investors also seek the advice of investment bankers to study the markets, inform them of good investments and compute future gains and insights of ROI and many such advisory activities.

The two are completely different though they are a part of the same banking division. Can an arm be used in place of a leg? Well, that should let you infer how these two divisions function and are not interchangeable. A certain degree of compatibility will still exist from a career point of view. However, retraining is the only solution.

To learn more about such differences you could do courses recommended below when your goal is to make a career in banking and financial institutions and the services they can offer.

• Investment banking courses
• Financial modelling training
• Equity Research Courses
• Venture capital and private equity training
• Hedge funds training
• IFRS certification
• CFA certification
• Credit Risk modeling
• Trading in cryptos training
• VBA, Excel and Macros Courses
• Data Analytics Courses

Doing analytics or financial courses offer a good grasp of fundamentals, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career. They also offer boot camps, short term workshops, and basic knowledge of the technological skills like Excel, Macros, SAS, R, Java and so on. While certification definitely helps you need to be an excellent communicator and work diligently to acquire the best analytical and business skills. Another advantage in such courses is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the fields of analytics and banking.

The payouts for investment bankers are far higher than in the commercial banking division. This having been said, do remember that it involves great interpersonal skills, a very specific set of technological skills, financial acumen and tireless work to be successful. A certified course on Investment Banking can definitely help enhance both your resume and career while allowing you to build that set of skills so essential to your job choices, career path, and payouts.

Even bankers can retrain themselves to broaden their fields and job opportunities considering the scope and high earnings of investment bankers. An ideal course for investment banker can equip you for the future. As long as money exists the scope for investment banking never dies down. Act on your choices today.

Also Read: How to Become an Investment Banker