Banque D'Affaires

Banque D'Affaires

Banques d'investissement, best described as French investment banks (IB), tend to work on shorter-term operations, while banques d'affaires mainly specialize in long-term financing and investment projects. Banques d'affaires usually operate in an advisory capacity as well, helping companies to find the best way to raise capital, go public through an initial public offering (IPO), make acquisitions, manage their debt, and pursue other corporate strategies. A banque d'affaires is a type of French financial institution (FI) that resembles a merchant bank, business bank, or corporate investment firm. They operate as intermediaries in corporate financial operations, such as initial public offerings (IPOs), capital increases, corporate takeovers and acquisitions, and debt management.

A banque d'affaires is a type of French financial institution (FI) that provides services similar to those offered by a merchant bank.

What Is a Banque D'Affaires?

A banque d'affaires is a type of French financial institution (FI) that resembles a merchant bank, business bank, or corporate investment firm. A banque d'affaires is not a deposit bank or credit institution serving the general public. Instead, it is more akin to a financial advisory firm for corporate and organizational clients. Circulating money is the main purpose of a banque d'affaires.

A banque d'affaires is a type of French financial institution (FI) that provides services similar to those offered by a merchant bank.
Banques d'affaires typically specialize in providing financing and advisory services to corporate and organizational clients.
They operate as intermediaries in corporate financial operations, such as initial public offerings (IPOs), capital increases, corporate takeovers and acquisitions, and debt management.

Understanding a Banque D'Affaires

Banques d'affaires typically offer two core services: providing financing for organizations and advising corporations on the best course of action in certain financial matters.

Lending

Banque d'affaires offer lending services to businesses, although not always in the same way as other FIs. After issuing a loan, the banque d'affaires will often sell off the debt to a third party, enabling it to make a quick profit and free up funds to lend more money — assuming, of course, that investors want a piece of the action.

In other words, the banque d'affaires regularly takes on the role of an intermediary. They match the needs of businesses requiring a cash infusion with investors, broker a deal between the two parties, and then move on to the next business transaction. 

Banques d'affaires operate as intermediaries in corporate financial operations.

On occasion, a banques d'affaires may also choose to conduct structured-finance activities with its own resources. In such cases, the bank would approve a loan with the intention of holding onto that debt and managing the asset until the borrower pays back the balance in full.

Advising

Banques d'affaires usually operate in an advisory capacity as well, helping companies to find the best way to raise capital, go public through an initial public offering (IPO), make acquisitions, manage their debt, and pursue other corporate strategies. In exchange for these services, and expertise on the potential return of projects, the banques d'affaires are paid a commission.

History of the Banques D'Affaires

Banques d'affaires were born out of the specialization of banks, a French policy that was ratified in the post-war reforms of 1945. Under these reforms, banques d'affaires could no longer hold their own short-term capital**.** Instead, they were only allowed to handle and manage stakes in new and existing businesses as well as provide long-term loans to organizations and corporate clients.

Banque D'Affaires vs. Banques D’Investissement

Some other types of French banks, such as banques d'investissement, may perform similar activities to a banques d'affaires. The biggest differentiator between the two is often time frames.

Banques d'investissement, best described as French investment banks (IB), tend to work on shorter-term operations, while banques d'affaires mainly specialize in long-term financing and investment projects. A banque d'affaires may help to facilitate a years-long corporate merger. Extensive analysis and negotiation are typically required, and the banque d'affaires will earn a substantial commission for its trouble.

Special Considerations

Banques d'affaires generally have no conflict of interest with credit or financing institutions, they and may even work closely with banques d'investissement or banques commerciales, French retail banks, in order to meet the needs of a client.

For example, a corporate client looking to finance an acquisition by issuing securities might have to work with a banque d'investissement in order to issue the securities and a banque d'affaires, some of which exist as a specialized department of a banque commerciale, in order to handle the acquisition.

Related terms:

Acquisition

An acquisition is a corporate action in which one company purchases most or all of another company's shares to gain control of that company. read more

Article XII Company

An Article XII company is an investment company chartered under the New York State Banking Law to finance international banking transactions. read more

Asset

An asset is a resource with economic value that an individual or corporation owns or controls with the expectation that it will provide a future benefit. read more

Capital Markets Group

A capital markets group is a division within a larger company that uses its financial expertise to provide financial services to certain clients. read more

Capital : How It's Used & Main Types

Capital is a financial asset that usually comes with a cost. Here we discuss the four main types of capital: debt, equity, working, and trading. read more

Checking Account

A checking account is a deposit account held at a financial institution that allows deposits and withdrawals. Checking accounts are very liquid and can be accessed using checks, automated teller machines, and electronic debits, among other methods. read more

Commission

A commission, in financial services, is the money charged by an investment advisor for giving advice and making transactions for a client. read more

Credit

Credit is a contractual agreement in which a borrower receives something of value immediately and agrees to pay for it later, usually with interest. read more

Debt

Debt is an amount of money borrowed by one party from another, often for making large purchases that they could not afford under normal circumstances. read more

Deposit

A deposit is both a transfer of funds to another party for safekeeping and the portion of funds used as collateral for the delivery of a good. read more

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