What is an 'Agent Bank '

An agent bank is a bank that acts in some capacity on behalf of another bank. It can mean any of three types of bank:
(1) The bank in a loan syndicate that advises other participating banks of advances taken and changes in interest rates for a foreign or domestic borrower
(2) A bank that participates in the credit card program of another bank by issuing credit cards and performing other duties (excluding financing card receivables)
(3) A foreign bank doing business in the U.S. on behalf of its parent bank, performing such tasks as issuing international letters of credit, but not accepting deposits

Also known as an "agency bank."

BREAKING DOWN 'Agent Bank '

A syndicate manager will receive a mandate from a borrower to arrange a syndicated loan. After the agreement closes, the duties of the syndicate manager end. At that point, the syndicate manager is usually appointed the agent bank, which coordinates the loan between the borrower and participating banks.

RELATED TERMS
  1. Syndicated Loan

    A loan offered by a group of lenders (called a syndicate) who ...
  2. Loan Syndication

    The process of involving several different lenders in providing ...
  3. Syndicate

    A professional financial services group formed temporarily for ...
  4. Distributing Syndicate

    A group of investment banks that work to underwrite and sell ...
  5. Underwriter Syndicate

    A temporary group of investment banks and broker-dealers who ...
  6. Lloyd's Of London

    A British insurance market where members join hands as syndicates ...
Related Articles
  1. Investing

    What is a Syndicated Loan?

    A syndicated loan is one that involves a group of lenders (called the syndicate) who pool their lending resources to make a loan.
  2. Personal Finance

    Are U.S. Banks Becoming Aggressive on Lending Again?

    Discover why banks are increasing their credit portfolios to include more credit cards and how this may impact your ability to borrow in the future.
  3. Investing

    What's a Correspondent Bank?

    A correspondent bank is a bank that acts on behalf of another bank, usually a foreign bank.
  4. Personal Finance

    Retail Banking Vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers.
  5. Investing

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  6. Personal Finance

    Understanding Credit Cards

    Credit cards are a type of unsecured personal loan between the credit card issuer and the credit card holder.
  7. Personal Finance

    Forget Your Bank Account - Use Your Credit Card

    What if you used your credit card as a bank account? Believe it or not, this strange strategy could actually work.
  8. Personal Finance

    Should You Use Credit Cards To Fund Your Business?

    We give you 4 reasons to consider using a credit card instead of a business loan to fund your business, and how to be smart about it.
  9. Small Business

    How to Use Small Business Credit Cards

    A small business credit card can be a convenient way to increase your company's purchasing power, but must be carefully managed.
  10. Investing

    Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
RELATED FAQS
  1. Under what circumstances might a syndicated loan be arranged?

    Learn about the types of syndicated loans, why some lenders choose to establish or join a syndicate, and why some borrowers ... Read Answer >>
  2. Who generally structures a syndicated loan?

    Learn what syndicated loans are, including how they are structured and administrated, usual payment terms and costs associated ... Read Answer >>
  3. What is considered a reasonable interest rate for a syndicated loan?

    Discover how syndicated loans work, why they are beneficial for businesses, and what is considered a reasonable interest ... Read Answer >>
  4. How risky is a syndicated loan for the lender?

    Read about risks associated with the syndicate loan market, including the problems of adverse selection and asymmetric information ... Read Answer >>
  5. What is the difference between loan syndication and a consortium?

    Learn about consortiums and loan syndications, two types of multiple banking arrangements designed to finance transactions ... Read Answer >>
  6. What are the typical repayment terms for a syndicated loan?

    Learn more about syndicated loans and how they are structured, specifically including the typical repayment terms for a syndicated ... Read Answer >>
Trading Center