The table of contents.

Investment bank
Distinguish feature and function of merchant and development banks
Financial institutions
Overview of banking business
Banking institution
Structure of Nigeria banking system

INVESTMENT BANK

Investment banking is a type of financial service that involves advising companies on mergers
and acquisitions, raising capital, and providing other types of financial advice. The process of
investment banking can be divided into three main stages: origination, execution, and
distribution.
The origination stage involves identifying and analyzing potential deals. During this stage,
investment bankers will analyze the financial situation of the client, as well as the market
conditions, to determine whether a deal is feasible.
The execution stage involves negotiating and structuring the deal.Investment banking is a type of
financial service that involves advising companies on mergers and acquisitions, raising capital,
and providing other types of financial advice. The process of investment banking can be divided
into three main stages: origination, execution, and distribution.
The origination stage involves identifying and analyzing potential deals. During this stage,
investment bankers will analyze the financial situation of the client, as well as the market
conditions, to determine whether a deal is feasible.
The execution stage involves negotiating and structuring the deal.
The four main areas of investment banking activity are:
- Capital raising: This involves helping companies raise capital through public offerings, private
placements, or other methods.
- Mergers and acquisitions: This involves advising companies on buying, selling, or merging
with other companies.
- Financial restructuring: This involves helping companies restructure their debt or capital
structure to improve their financial situation.
2. DISTINGUISH FEATURE AND FUNCTION OF MERCHANT AND DEVELOPMENT
BANKS

Merchant banks and development banks serve distinct functions in the financial industry and
have different features. Here's an overview of their features and functions:

MERCHANT BANKS
1 .Corporate advisory services: merchant bank provide advisory services to corporations . They
assist in financial restructuring,mergers and acquisitions and strategic planning.
2 . Fundraising: They help companies raise capital by underwriting securities such as stocks and
bonds,and facilitating initial public offerings (IPOs)
3 . Asset management:. Some merchant banks offer asset management services, managing
investment portfolios for high net worth individuals and institutions.
4. Market making:. Merchant banks often engage in market making which involves buying and
selling financial instruments to provide liquidity to markets.
5 . Risk management:. Merchant banks help clients manage financial risks through various
financial instruments and strategies.

DEVELOPMENT BANKS

1. Economic development:. Development banks are primarily focused on promoting economic

development within a country or region.
2. Infrastructure financing:. Development banks play a crucial role in financing infrastructure
projects such as roads,bridges,ports,and energy facilities which are vital for economic
development.
3. Agricultural support: They provide financial support and technical assistance to the
agriculture sector including farmers and agribusiness to enhance food security and rural
development.
4. SME development: They often focus on supporting small and medium sized enterprises by
providing financing and technical assistance to help them grow and creat jobs.
5 .Education and healthcare finance: They also invest in projects related to education and
healthcare infrastructure to improve access to quality education and healthcare services.
FEATURES
1 . Public or quasi public ownership: Development banks are often government owned or
government sponsored institutions. Although some may be private. Their primary goal is to
promote public welfare and economic development.
2 . Long term financing:. They specialized in offering long term financing to projects and sectors
that are critical for economic development such as infrastructure, agriculture and SME.
3 . Risk capital:. Development banks are willing to take on higher risks than traditional
commercial bank. They may provide funding to projects with uncertain profitability.
4 . Development focus:. Their primary mission is to foster economic growth, reduced poverty
and promote job creations.

3. FINANCIAL INSTITUTIONS

Financial institutions are entities that provide various financial services to individuals,
businesses, and governments. These institutions play a crucial role in the economy by mobilizing
funds from surplus units and channeling them towards deficit units. The financial institutions can
be splitted into the bank and non bank financial institutions. The bank financial institutions
include: commercial banks, merchant banks, development banks, community banks while the
non bank financial institutions include: finance companies, insurance companies, bureau-de
change, primary mortgage institutions, pension and provident funds, unit trust, co-operative
societies etc.
The difference between the bank and non bank financial institution is that the bank financial
institutions are direct channels for the transfer of funds from the surplus to the deficit units while
the non- banking institutions are indirect channels for the transfer of funds from the surplus to
the deficit units.

Here are some common types of financial institutions:

1. Commercial Banks: These are the most common type of financial institution. They accept
deposits from customers and provide loans and other financial services. They also facilitate
transactions such as wire transfers, issuing credit cards, and providing lines of credit.

2. Investment Banks: These institutions help corporations and governments raise capital by
issuing securities like stocks and bonds. They also offer advisory services for mergers and
acquisitions, and provide financial expertise for complex transactions.

3. Co-operative societies : These are member-owned financial cooperatives that offer similar
services to commercial banks. Credit unions typically serve specific communities or groups and
often offer lower interest rates on loans and higher interest rates on deposits compared to banks.

4. Insurance Companies: These institutions provide insurance policies to individuals and

businesses, protecting them from financial risks such as theft, accidents, or natural disasters.
They collect premiums from policyholders and pay out claims as per the policy terms.

5. Brokerage Firms: These institutions facilitate buying and selling of securities such as stocks,
bonds, and mutual funds on behalf of investors. They also provide investment advice, research
reports, and other related services.
6. Mutual Funds: Mutual funds pool money from multiple investors and invest in a diversified
portfolio of stocks, bonds, and other securities. They offer individual investors access to a
professionally managed investment portfolio.

7. Pension Funds: These funds are established by employers or governments to provide

retirement benefits to employees. They manage large investment portfolios with the goal of
generating returns that can meet future pension obligations.
8. Development banks: These are banks specialized to provide medium and long credits for the
creation or expansion of commerce, industries and agriculture in the development of
entrepreneurship in developing countries.

These institutions are regulated by government authorities to ensure stability and protect the
interests of depositors and investors. They are subject to specific regulations regarding capital
adequacy, risk management, consumer protection, and disclosure requirements.

4 . OVERVIEW OF BANKING BUSINESS

The banking business involved financial institutions that offer a wide range of financial
services to individuals, businesses and government. Here's an overview:
1 .Core functions:
a . Accepting deposit: Banks provide a safe place for people to deposit their money, offering
various types of accounts such as current account,fixed account and savings account.
b . lending money:. Banks lend funds to individuals and businesses charging interest on loans.
2 . Types of banks
a . Commercial bank:. Serve businesses, providing services like business loans, cash
management and trade finance.
b . Investment bank: focus on capital market, helping companies raise capital through stocks and
bonds.
c . central bank: control a country monetary policy and regulate the banking system to ensure
stability.
3 . Financial services
a . Payment services: banks enable transaction through cheque,debit cards, credit cards and
digital payment methods.
b . wealth management: provide investment and asset management services for high net worth
individuals and institutions.

5. BANKING INSTITUTIONS

Banking institutions are financial organizations that provide various banking services to
individuals, businesses, and governments. Some common types of banking institutions include:

Commercial Banks: These are the most common type of banking institutions and offer a wide
range of services, including savings and checking accounts, loans, credit cards, and more.

Investment Banks: Investment banks primarily focus on providing financial services to

corporations and governments. They help with mergers and acquisitions, underwriting securities,
and trading in financial markets.
Central Banks: Central banks are government institutions responsible for regulating a country's
money supply, controlling inflation, and maintaining financial stability. They often issue
currency and set interest rates.

Credit Unions: Credit unions are member-owned financial cooperatives that offer services
similar to commercial banks. They are typically organized around a specific community,
profession, or organization.

Savings and Loan Associations (S&Ls): These institutions traditionally specialized in providing
savings accounts and home mortgages. However, many have expanded their services to include
other banking products.

Online Banks: Online banks operate exclusively through the internet, offering a variety of
banking services without physical branches. They often provide competitive interest rates and
lower fees.

Cooperative Banks: Cooperative banks are owned and operated by their customers, known as
members. They offer a range of banking services and often have a community or regional focus.

Merchant Banks: Merchant banks specialize in providing financial services to businesses,

including advisory services, trade finance, and capital raising.

Development Banks: Development banks focus on providing long-term financing for projects
that promote economic development, such as infrastructure, agriculture, and small business
initiatives.

Islamic Banks: Islamic banks operate in accordance with Islamic law (Shariah) principles, which
prohibit interest (usury) and promote ethical financial practices.

These are some of the key types of banking institutions, but there are many other specialized and
niche banking entities that cater to specific financial needs and markets. Banking institutions
play a crucial role in the global economy by facilitating transactions, managing funds, and
supporting economic growth.

6. STRUCTURE OF BANKING SYSTEM IN NIGERIA

The structure of Nigeria banks

The banking system in Nigeria is instructed along six layers which are:
1: deposits money bank :comprise of commercial banks and other financial institutions that
accept transferable deposits such as demand deposits. It deposit money banks are financial
entities that have been approved by the regulatory body to collect deposits from the economy
surplus unit.

2: development finance institutions: it is an organization owned by the government or charitable

institutions to provide funds for low-capital ,projects or where their borrowers are able to get it
from commercial lenders.
This are banks in Nigeria that focus on providing long-term financing for development
projects,the support sector like agriculture,infrastructure,housing and small scale businesses their
goal is to promote economic growth and development in the country.

3: mortgage banks: this is a bank specializing in mortgage loans,it can be involved in organizing
or servicing mortgage loans or both. The bank loan their capital to borrowers and either collect
payments in installments along with a certain rate of interest or sell their loans in the secondary
market.the structure varies loan at a cheap rate or with better funding arrangements and involves
various activities like loan organization,mortgage sale and loan/mortgage securities.

4: micro-finance institutions: these are institutions that provide financial services such as small
loans and savings accounts to individuals and small businesses who may not have access to
traditional banking services. They play a crucial role in promoting economic empowerment at
the grass root level most micro-finance institutions focus on offering loans sometimes called
micro loans or microcredit.

5: merchants banks : these bank deals with commercial loans and investment in modern British
usage as it is the same as investments bank. Merchants banks are institutions that provide loans
and capital for business entrepreneurs.these means that they may also provide consulting services
or help their clients,structure large international transactions.merchants bank also provides
different services from both retail and investment bank.

6: commercial bank: These is the most common type of banks that provide a wide range of
financial services to individuals businesses and organizations,they offer services such as savings
accounts, loans ,credit card and investment opportunities.meanwhile commercial bank plays a
vital role in facilitating economic activities and supporting the financial need of the public.