Corporate banking is a generic term given to different banking services that large companies, governments, or other big institutions need in order to carry out daily functions.
Corporate banking consists of simple business of issuing loans to more complex matters, such as helping minimize taxes paid by overseas subsidiaries, managing changes in foreign exchange rates, or working out the details of financing packages necessary for the construction of a new office, plant or other facility.
In many cases, there is an overlap between corporate banking and capital markets. Bankers associated with capital markets help companies raise money by issuing equities or debt whereas corporate banking has the bankers who typically help clients raise money through loans. When necessary, corporate bankers will bring in the expertise of their capital markets colleagues.
Corporate banking also needs an understanding of complex financing methods like securitization, where a company sells bonds based on the money it will earn in the future from assets such as rented shop space or a back catalogue of products.
During the last five years, in an atmosphere of fierce competition, the corporate banking has changed considerably as there has been an enormous consolidation taking place. One of the most important among such consolidations is UK based Royal Bank of Scotland integrating the operations of Dutch asset manager ABN Amro.
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