Underbanked

AAA

DEFINITION of 'Underbanked'

A situation where an underwriter of a new securities issue has been unsuccessful in getting other firms to become members of the underwriting group or syndicate. As a result, the security will not be sold to as many clients as had been desired.


Underbanked can also refer to an individual or business that heavily relies on checks and cash as a mean of funding rather than bank related methods such as credit cards or loans.

INVESTOPEDIA EXPLAINS 'Underbanked'

An investment banker is underbanked when he or she is facing challenges in acquiring additional members for the underwriting group or syndicate for a new securities issue. If the originating investment banker is unable to find enough firms, he or she may not be able to underwrite the issue - and therefore would be unable to offer the security for sale.

RELATED TERMS
  1. Investment Bank - IB

    A financial intermediary that performs a variety of services. ...
  2. Syndicate

    A professional financial services group formed temporarily for ...
  3. Lead Underwriter

    A investment bank or other financial outfit that has the primary ...
  4. Investment Banker

    An individual who works in a financial institution that is in ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Advanced Diploma In Insurance

    A qualification earned by insurance professionals and conferred ...
RELATED FAQS
  1. Why do banks used the Five Cs of Credit?

    Banks use rigorous policies and analyses when determining if and how much money to lend to clients. The methods used by banks ... Read Full Answer >>
  2. I need special accommodations when taking the Series 63 exam. How are such arrangements ...

    The Series 63 exam is administered by the North American Securities Administrators Association (NASAA) to test financial ... Read Full Answer >>
  3. Do I need a class to take the Series 63 exam?

    There are no specific educational prerequisites for the Series 63 exam or the Series 7 exam candidates must pass before sitting ... Read Full Answer >>
  4. What does the underwriter do in a new stock offering?

    The underwriter in a new stock offering serves as the intermediary between the company seeking to issue shares in an initial ... Read Full Answer >>
  5. What are the major differences between investment banking and private equity?

    Private equity and investment banking both raise capital for investing purposes but tend to do so in very different ways. ... Read Full Answer >>
  6. How is the Chairman of the Securities and Exchange Commission (SEC) chosen?

    The Chairman of the Securities and Exchange Commission (SEC) is appointed personally by the president of the United States. ... Read Full Answer >>
Related Articles
  1. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  2. Professionals

    Top Things To Know For An Investment Banking Interview

    Without some basic knowledge, you won't get the job. Find out what you need to know and how to prepare.
  3. Professionals

    How To Make $1 Million In Finance

    The best opportunities to maximize sheer earning power are in investment banking, private equity and hedge funds. Find out what it takes to succeed in these ultra-lucrative areas of finance. ...
  4. Professionals

    Wanna Be A Bigwig? Try Investment Banking

    A career in this high-stress field can be very rewarding for the right person. Find out if you have what it takes.
  5. Professionals

    Getting An Investment Bank Job During A Recession

    Even in a recession, investment banks are seeking new talent. Learn what will set you apart from the crowd!
  6. Stock Analysis

    What Makes Goldman Sachs a Good Bet?

    Six years after the subprime meltdown, Goldman Sachs is a robust $87 billion company instead of a historical footnote. Here's why.
  7. Investing Basics

    Understanding Private Placement

    Private placement refers to offering and selling shares in a company to a small group of sophisticated buyers.
  8. Entrepreneurship

    JPMorgan vs. Goldman Sachs: A Tale of Two Stocks

    The performance of JPMorgan and Goldman has been impressive, but one has a slight edge.
  9. Investing

    4 Hottest IPOs in 2015

    Where is smart money headed this year? These are the most anticipated IPOs of 2015.
  10. Professionals

    Financial Accounting

    Financial accounting is the process of gathering, recording, summarizing and reporting financial data relating to a business. The ultimate goal is to accurately report the financial picture and ...

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center