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Question # 1:

INVESTMENT BANK
Introduction:
Investment bankers function as intermediaries in financial transactions. They
are experienced in carrying out projects that, for most companies, take place
very rarely, but are critically important.

The Function of the Investment Bank:

Investment banks provide four primary types of services: raising capital,
advising in mergers and acquisitions, executing securities sales and trading,
and performing general advisory services. Most of the major Wall Street
firms are active in each of these categories. Smaller investment banks may
specialize in two or three of these categories.

1. Raising Capital: An investment bank can assist a firm in raising funds

to achieve a variety of objectives, such as to acquire another company,
reduce its debt load, expand existing operations, or for specific project
financing. Capital can include some combination of debt, common
equity, preferred equity, and hybrid securities such as convertible debt
or debt with warrants. Although many people associate raising capital
with public stock offerings, a great deal of capital is actually raised
through private placements with institutions, specialized investment
funds, and private individuals. The investment bank will work with the
client to structure the transaction to meet specific objectives while
being attractive to investors.

2. Mergers and Acquisitions: Investment banks often represent firms

in mergers, acquisitions, and divestitures. Example projects include the
acquisition of a specific firm, the sale of a company or a subsidiary of
the company, and assistance in identifying, structuring, and executing
a merger or joint venture. In each case, the investment bank should
provide a thorough analysis of the entity bought or sold, as well as a
valuation range and recommended structure.

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3. Sales and Trading: These services are primarily relevant only to

publicly traded firms, or firms which plan to go public in the near
future. Specific functions include making a market in a stock, placing
new offerings, and publishing research reports.

4. General Advisory Services: Advisory services include assignments

such as strategic planning, business valuations, assisting in financial
restructurings, and providing an opinion as to the fairness of a
proposed transaction

5. Ongoing Support: Having worked on a transaction for your company,

the investment bank will be intimately familiar with your business.
After the transaction, a good investment bank should become a trusted
business advisor that can be called upon informally for advice and
support on an ongoing basis

Question#2:

TOP TEN INVESTMENT OF WORLD

1: Scotia Capital (Canada)
Scotia Capital, the wholesale banking arm of Scotiabank, had a record year
in 2009 for its equity platform. The bank participated in 211 equity deals,
valued at $8.5 billion. In September 2009 Scotia Capital was joint bookrunner
for Barrick Gold's treasury offering of $4 billion of common shares. It also
was the number-one underwriter of corporate debt in Canada last year.
Scotia Capital was lead bookrunner of a $380 million subscription receipt
offering that enabled Great Lakes Hydro Income Fund to acquire 15
hydroelectric facilities and a wind-farm project.

2: J.P. Morgan (United States)

J.P. Morgan was the leading underwriter for both high-yield and investment-
grade corporate debt in the US in 2009. The bank underwrote 331
investment-grade deals, with proceeds of $94.6 billion. It remained number
one in the first quarter of 2010, with an additional $33 billion in proceeds
from investment-grade debt. J.P. Morgan also was the top underwriter of

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equity and equity-related issues in the US in the first quarter and led in US
common stock and convertible bond issues.

3: BNP Paribas (France)

BNP Paribas, France's largest bank, is one of the top investment banks in
Europe's debt and equity capital markets. The corporate and investment
banking division has 17,000 employees in 53 countries. BNP Paribas was the
financial adviser on 54 M&A transactions involving France-based companies
in 2009, more than any other bank. It was number two in terms of deal
value.

4: Deutsche Bank (Germany)

Deutsche Bank's trading and investment banking revenue doubled in the
first quarter of 2010 from the same period a year earlier. Deutsche Bank's
corporate and investment bank contributed more than 90% of its earnings in
the first three months of this year. Deutsche Bank was the only European
bank selected as a lead manager on Agricultural Bank of China's upcoming
record $29 billion IPO.

5: Mediobanca (Italy)
Mediobanca, Italy's leading investment bank, serves its share of major
corporations in Italy but has been shifting its focus in recent years to mid-
size companies. Mediobanca was the number-one financial adviser on
mergers and acquisitions involving companies in Italy in 2009. It advised on
33 such deals, valued at $30 billion, according to Thomson Reuters.

6: ING (Netherlands)
ING was the number-one adviser on M&A transactions in the Netherlands last
year, both in terms of volume and value. It also was number one in the
equity capital markets in the Benelux region by volume and the leading bank
for debt capital markets in the Netherlands. ING was sole lead M&A adviser
to TeneT, the Dutch state-owned utility, on its acquisition of E.ON's high-
voltage power grid in Germany.

7: CaixaBI (Portugal)
Caixa-Banco de Investimento (CaixaBI) is the investment bank arm of Caixa
Geral de Depósitos, the largest banking group in Portugal. It opened an office
in Brazil last year and was co-manager of Banco Santander Brasil's $8 billion
IPO. CaixaBI was the number-one bookrunner for corporate bond issues in

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Portugal in 2009. It also was the leading adviser in Portugal's equity capital
market.

8: Troika Dialog (Russia)

Troika Dialog is the oldest and largest independent investment bank in
Russia and the Commonwealth of Independent States. It operates in 21 cities
in Russia and is the leading financial adviser on Russian M&A and
restructuring deals. Troika is also the leader in Russian equity sales and
trading on behalf of clients worldwide. The firm is active in the Russian,
Kazakh and Ukrainian bond markets.

9: Santander (Spain)
Santander, the biggest bank in Spain and one of the largest in Europe, is
beefing up its investment banking operations. In Brazil the bank raised $8
billion last October by selling a 16% stake in Banco Santander Brasil in an
initial public offering. Santander's global operations are helping it weather
the economic slump in its home market.

10: Credit Suisse (Switzerland)

Credit Suisse ranked number two in Europe and number one in the UK in
advising on mergers and acquisitions in 2009, according to Thomson
Reuters. The bank also has been focusing on building up its debt-trading
operations. Credit Suisse was a lead manager on Qatar's $7 billion sovereign
debt issue last year, which was the biggest emerging market bond offering
ever.

INVESTMENT BANKS IN PAKISTAN

• BMA Capital Management Limited

• Invest Capital Investment Bank Limited

• AMZ Securities

• Orix Leasing (Pakistan) Limited

• Trust Investment Bank Limited

• JS Investment Bank Limited

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• Atlas Investment Bank Limited

• Al towfeek Investment Bank Limited

• First Investment Bank Limited

• Escorts Investment Bank Limited

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Difference between investment bank and commercial
bank
COMMERCIAL BANKS
A commercial bank may legally take
deposits for checking and savings accounts
from consumers.
The typical commercial banking process is
fairly straightforward. You deposit money
into your bank, and the bank loans that
money to consumers and companies in
need of capital (cash). The commercial
bank generates a profit by paying
depositors a lower interest rate than the
interest rate bank charges on loans.
Loan offering:
Loans from commercial banks are
structured as private legally binding
contracts between two parties, the bank
and Client (or the bank and a company).
Banks work with their clients to individually
determine the terms of the loans, including
the time to maturity and the interest rate
charged.
Commercial banks thus make money by
taking advantage of the large spread
between their cost of funds and their return
on funds loaned. A commercial bank
making a loan actually receives the interest
and simultaneously owns the debt.
Working of Commercial banks: Working of Investment banks:
Commercial banks (even before Glass-
Steagall repeal) were able to legally
underwrite debt, and some of the largest
commercial banks have developed
substantial expertise in underwriting public
bond deals. So, not only do these banks
make loans utilizing their deposits, they
also underwrite bonds through a corporate
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INVESTMENT BANKS
An investment bank does not have an
inventory of cash deposits to lend. In
essence, an investment bank acts as an
intermediary, and matches sellers of stocks
and bonds with buyers of stocks and bonds.
An investment bank finds investors in order
to obtain capital for its client. Investment
banks are increasingly seeking to become
"one-stop" financing sources, many
investment banks have set aside billions of
dollars of their own capital that they can use
to loan to clients directly.
Capital stock offering:
Investment bank involved in the offering
does not own the Capital stock but merely
placed them with investors at the outset, it
earns no interest. The investment bank
makes money by charging the client a small
percentage of the transaction upon its
completion. Investment banks call this
upfront fee the "underwriting discount.”
Legally, most Capital stock must first be
approved by the Securities and Exchange
Commission, The investment bankers guide
the company through the SEC approval
process, and then market the offering
utilizing a written prospectus, its sales force
and a road show to find investors.
Investment banks underwrite stock
offerings just as they do bond offerings. In
the stock offering process, a company sells
a portion of the equity (or ownership) of
itself to the investing public. The very first
time a company chooses to sell equity, this
offering of equity is transacted through a
process called an initial public offering of
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finance department. When it comes to
underwriting bond offerings, commercial
banks have long competed for this
business directly with investment banks.
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stock. Through the IPO process, stock in a
company is created and sold to the public.
After the deal, stock sold in the U.S. is
traded on a stock exchange such as the
New York Stock Exchange.
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References:

1. http://www.gfmag.com

2. http://www.gfmag.com/archives/124-june-2010/10345-best-
investment-banks-2010-country-winners.html#ixzz1FM70tmmd

3. http://en.wikipedia.org/wiki/List_of_banks_in_Pakistan

4. http://findarticles.com/p/articles/mi_hb092/is_n3_v26/ai_n28654895/

5. http://www.vault.com/articles/Commercial-Banking-vs.-Investment-
Banking--16020806.html

6. http://www.bankingquestions.com/manageyourmoney/2008/q_1003_ic
omorinv.html