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. DJF

    The ISO 4217 currency code for the Djiboutian franc, the official ...
  2. French Franc - F

    A currency used in France, prior to the introduction of the euro. ...
  3. Bank Of Central African States

    The central bank serving the Economic and Monetary Community ...
  4. Corporate Finance

    1) The financial activities related to running a corporation. ...
  5. Wholesale Banking

    Wholesale banking refers to banking services such as currency ...
  6. Financial Institution - FI

    An establishment that focuses on dealing with financial transactions, ...
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. Personal Finance

    Retail Banking vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking refers to the aspect of banking that deals with corporate customers. Check out more on the differences between ...
  4. Personal Finance

    Private banking versus wealth management

    Discover the various ways in which private banking and wealth management services coincide, as well as the significant differences between them.
  5. Investing

    Uncovering the Securities Firm

    Learn about the various departments of a securities firm and the professionals who work there.
  6. Insights

    Inside National Payment Systems

    Investopedia explains: The global interconnection of U.S. payment systems makes commerical and financial transfers possible.
  7. Insurance

    The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  8. Managing Wealth

    Top 6 Brazilian Billionaires

    Brazil is set to be an economic superpower in the near future, and these are some of the country's richest citizens.
  9. Personal Finance

    A Look At Entry-Level Careers In Finance

    Learn more about the career options that are available to you after you've obtained your finance degree.
RELATED FAQS
  1. What is the difference between an investment and a retail bank?

    Learn the primary differences between retail banks and investment banks by examining the business activities, type of clients ... Read Answer >>
  2. What is finance?

    Finance is the study of how money is managed and the process of acquiring needed funds. Personal finance, corporate finance ... 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 >>
Trading Center