DEFINITION of 'Banque D'Affaires'

A Banque d’Affaires is a type of French financial institution that resembles a merchant bank, business bank or corporate investment firm. It is not a deposit bank or a credit institution; it is instead more akin to a financial advisory firm for corporate and organizational clients. Banques d'affaires typically specialize in providing financing for organizations and also advising corporations on the best course of action in certain financial matters. They operate as financial intermediaries in corporate financial operations, such as initial public offerings (IPOs), capital increases, corporate takeovers and acquisitions and debt management. Circulating money is the main purpose of a banque d’affaires.

BREAKING DOWN 'Banque D'Affaires'

Banques d'affaires may conduct structured-finance activities with their own resources. Interestingly, banques d'affaires do not tend to hold onto assets for prolonged periods of time, because the assets tend to be sold off to investors for a subsequent profit. Therefore, the banque-d’affaires is exposed to the risk that the market may not be conducive to the offering.

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, but instead could only handle and manage stakes in new and existing businesses, and provide long-term loans to organizations and corporate clients.

Specialization of Banques d’Affaires

Some other types of French banks, such as banques d’investissement, may perform similar activities. However, banques d’investissement work on shorter-term operations, while banques d’affaires specialize in long-term financing and investment projects. For example, 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.

Banques d’affaires generally have no conflict of interest with credit or financing institutions, and may even work closely with banques d’investissement or banques commerciales in order to meet the needs of a client. For example, a corporate client looking to finance an acquisition by issuing securities may have to work with a banque d’investissement in order to issue the securities, and a banque d’affaires in order to handle the acquisition. Some banques d’affaires may exist as a specialized department of a banque commerciale, or retail bank.

RELATED TERMS
  1. National Fund For Hydrocarbon Reserves ...

    The National Fund for Hydrocarbon Reserves is a sovereign wealth ...
  2. LBP (Lebanese Pound)

    The LBP is an abbreviation for the Lebanese pound (LBP), the ...
  3. Merchant Bank

    A merchant bank is a bank that deals mostly in (but is not limited ...
  4. Financial Institution - FI

    A financial institution is a company that focuses on dealing ...
  5. Wholesale Banking

    Wholesale banking refers to banking services such as currency ...
  6. Institutional Fund

    An institutional fund is a fund with assets invested by institutional ...
Related Articles
  1. Insights

    Inauguration Sell Signal for Trump-Putin Bromance

    Talk of a Trump-Putin bromance may end if Russian stocks, bonds and the ruble sell off after the inauguration
  2. Insights

    The 3 Biggest Canadian Banks (RY, TD)

    Examine some of the largest banks in Canada, which also rank among the largest and most important banks in the industry worldwide.
  3. Investing

    Who Holds The Largest Gold Reserves?

    The biggest holders of gold account for 30,500 of the world's estimated 160,000 tonnes.
  4. Investing

    Uncovering the Securities Firm and How They Work

    Despite their importance, securities firms are still somewhat of a mystery to the average investor. Learn about what these professionals are involved with.
  5. Small Business

    What Merger and Acquisition (M&A) Firms Do

    For a business planning to make a deal, it can be intimidating. This is why merger and acquisition firms step in to lead the buying and selling process.
  6. Insights

    The World's Top 10 Banks

    Learn more about the world's largest banks and how more financial power shifts eastward as China is home to four of the world's largest banks.
  7. Personal Finance

    Financial career options for professionals

    The financial services industry is multifaceted, offering a variety of positions. Learn about your career options today.
  8. Personal Finance

    The Evolution of Banking Over Time

    Discover how the evolution of banking has changed the business model. Find out how this system of money management developed into what we know today.
RELATED FAQS
  1. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Answer >>
  2. How does investment banking differ from commercial banking?

    Discover how investment banking differs from commercial banking, the responsibilities of each and how the two can be combined ... Read Answer >>
  3. What does the 'FIG' at an investment bank refer to?

    The 'FIG' at an investment bank usually refers to the financial institutions group - a group of professionals that provides ... Read Answer >>
  4. What factors are the primary drivers of banks' share prices?

    Find out which factors are most important when determining the share price of banks and other lending institutions in the ... Read Answer >>
  5. What is the banking sector?

    Learn why the banking sector is a vital industry to our economy, what it does to drive the economic growth and understand ... Read Answer >>
Trading Center