Difference between investment banking and merchant banking tabular form
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Merchant banks and investment banks are different kinds of financial institutions that perform different services. Traditional merchant banks often expand into the field of securities underwriting, while many investment banks participate in trade financing activities. In theory, investment banks and merchant banks perform different functions.
A merchant bank is a financial institution that engages in underwriting and business loans, catering primarily to the needs of large enterprises and high net worth individuals. In the British market, the term merchant bank refers to an investment bank. Like investment banks, merchant banks are not depository/retail lender institutions. Rather, merchant banks are intermediaries that provide fund raising and financial advisory services on a large scale to businesses and a smaller scale to wealthy individuals. For this reason, they often assist in international transactions involving entities such as multinational corporations.