To provide a more comprehensive suite of solutions for our clients in corporate banking, we also work with business lines within Global Markets. These include corporate sales (FX and rates), cross-asset sales and prime services and clearing. This post will be an overview of the three main business lines we work with:
1) Corporate sales: This team sells FX and rates solutions to corporate clients as suggested by its name. The purpose of these solutions is to help corporates hedge currency and interest rate risks via key products, namely FX forwards and swaps, as well as interest rate swaps. These solutions are especially crucial for large companies with cross-border transactions (FX risk) or significant debt on their balance sheet (interest rate risk).
2) Cross-asset sales: There may be different cross-asset sales teams in a particular bank. A key product that corporate clients may look at is secured hedging products like interest rate swaps. However unlike in (1) which is done on a corporate level, this swap is typically tailored for a specific project or asset financing transaction and hence aligned with the financing structure.
3) Prime services and clearing: The prime desks in an investment bank are the ones that can handle the trading of a wide range of products, including complexed ones, hence they typically cater to hedge funds. Clearing, on the other hand, refers to the execution of a transaction or trade on an exchange, ensuring the smooth and secure settlement of agreements.
(1) and (3) are typically flow-based businesses, with fluctuations in revenue dependent on client needs and market changes. On the other hand, (2) is contingent on the financing of an asset and hence revenue is tied to new deals in the pipeline.
No comments:
Post a Comment