investment banking in Pakistan.

1. Investment Banks
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Submitted To:
Submitted By:
Sir Basharat Raza
Nasir Abbas 31 (1749)
Ahsan Anwar 15 (1735)
Syed Faryad Ali 69 (1780)
Investment Bank
Financial Institutions

2. Investment Banks
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Table of Content
Topics Pages
Introduction 3
Organizational Structure 4
Front Office 4
Middle Office 6
Back Office 6
Functions of Investment bank 7
How do investment banks make money from offering these services to their clients? 8
Investment Banks in Pakistan 9
NIB Bank 9
IGI Investment Bank 11
CITI Bank 12
Meezan Bank LTD. 13
AL Baraka Bank 15
Some other Investment Banks 16
Criticisms 17

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INTRODUCTION
An INVESTMENT BANK is a financial institution that assists individuals, corporations, and
governments in raising financial capital by underwriting or acting as the client's agent in the
issuance of securities. An INVESTMENT bank may also assist companies involved in mergers
and acquisitions (M&A) and provide ancillary services such as market making, trading
of derivatives and equity securities, and FICC services (fixed income instruments, currencies,
and commodities).
The two main lines of business in INVESTMENT banking are called the sell side and the buy
side. The "sell side" involves trading securities for cash or for other securities (e.g. facilitating
transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.).
The "buy side" involves the provision of advice to institutions concerned with buying
investment services. Private equity funds, mutual funds, life insurance companies, unit trusts,
and hedge funds are the most common types of buy side entities.

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Organizational structure
INVESTMENT banking is split into front office, middle office, and back office activities
Front Office
Front office is generally described as a revenue generating role.
There are four areas within front office:
 Investment Banking
 Investment Management
 Sales& Trading
 Research & Structuring.
INVESTMENT BANKING
Front Office Middle Office Back Office

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Investment Banking
Investment banking is the traditional aspect of investment banks which involves helping
customers raise funds in the Capital Markets and advising on Mergers and Acquisitions (M & A).
Investment bankers prepare idea pitches that they bring to meetings with their clients, with the
expectation that their effort will be rewarded with a mandate when the client is ready to
undertake a transaction. Once mandated, an investment bank is responsible for preparing all
materials necessary for the transaction as well as the execution of the deal, which may involve
subscribing investors to a security issuance, coordinating with bidders, or negotiating with a
merger target. Other terms for the Investment Banking Division include Mergers & Acquisitions
(M&A) and Corporate Finance (often pronounced).
Investment Management
The professional management of various securities (shares, bonds etc) and other assets (e.g.
real estate), to meet specified investment goals for the benefit of the investors. Investors may
be institutions (insurance companies, pension funds, corporations etc.) or private investors.
Sales and Trading
This area is often the most profitable area of an investment bank and is responsible for the
majority of revenue of most investment banks. In the process of market making, traders will
buy and sell financial products with the goal of making an incremental amount of money on
each trade. Sales is the term for the Investment bank's sales force, whose primary job is to call
on institutional and high-net-worth investors to suggest trading ideas (on a caveat
emptor basis) and take orders. Sales desks then communicate their clients' orders to the
appropriate trading desks, who can price and execute trades, or structure new products that fit
a specific need.
Research & Structuring
Research& structuring is the division which reviews companies and writes reports about their
prospects, often with "buy" or "sell" ratings. While the research division generates no revenue,
its resources are used to assist traders in trading, the sales force in suggesting ideas to
customers, and investment bankers by covering their clients.

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Middle Office
The main role of this area is Risk Management. Risk Management involves analyzing the market
and credit risk that traders are taking onto the balance sheet in conducting their daily trades,
and setting limits on the amount of capital that they are able to trade in order to prevent 'bad'
trades having a detrimental effect to a desk overall.
Another key role is to ensure that the above mentioned economic risks are captured accurately
(as per agreement of commercial terms with the counterparty) correctly (as per standardized
booking models in the most appropriate systems) and on time (typically within 30 minutes of
trade execution).
Back Office
There are two areas within back office
Operations
This involves data-checking trades that have been conducted, ensuring that they are not wrong,
and transacting the required transfers. Many banks have outsourced operations. It is, however,
a critical part of the bank.
Technology
Every major Investment bank has considerable amounts of in-house software, created by the
technology team, who are also responsible for technical support. Technology has changed
considerably in the last few years as more sales and trading desks are using electronic trading.
Some trades are initiated by complex algorithms for hedging purposes.
Firms are responsible for compliance with local and foreign government regulations and
internal regulations.

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Functions/Role of Investment Bank
An Investment bank has many functions to perform some of them are given below:
 IPO
Investment Banks facilitate Public n Private Corporation’s initial public offering known as
IPO by providing underwriting servicers. Other services include acting as intermediaries
in trading for client and foreign exchange management.
 Giving advice
Advising clients on buying and selling companies, the structuring of their financial
affairs, raising money, economic risk management and the purchase of financial
products.
 Providing financing:
Making loans to and purchasing the shares of corporate, and assisting corporate in
finding other parties to do so.Investment bankers can also arrange financing for
companies. Through their relationships with big investment funds, they can help obtain
equity financing (by issuing shares) or debt financing (by issuing corporate bonds), as
well as bank loans.
 Investment Management :
Investment banker also provide advice to investor to purchase, mange and trade various
securities (share, bonds, etc) and other assets like real estate, hedge fund mutual funds
etc. investors may be financial institution or big fund houses or private investors.
 TRADING:
Buying and selling shares, debt products, commodities, derivatives and related products
on behalf of clients and to make money for the bank.
 Research:
Monitoring industry trends and economic developments for the bank’s own purposes
and for clients.

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 Raise equity capital
This includes helping launch an IPO or creating a special class of preferred stock that can
be placed with sophisticated investors such as insurance companies or banks
 Mergers and Acquisitions (M&A)
Another major function of Investment bank is providing the facilities of an advisory on
sale, merger and purchase of companies.
 Risk Management
This is a continuously going activity which involves analyzing the market and credit risk
that traders are taking onto the balance sheet in conducting their daily trades.
How do investment banks make money from offering these services to
their clients?
Investment banks get their income from the following sources:
 Fees: charged for advice, providing finance, keeping money available for clients,
arranging financing for clients from other parties, TRADING SERVICES, investment
services, and research.
 Dividends: income from investments made in shares.
 Interest: income from loans made.
 Investments: profits from investments made.
 TRADING: profit made from buying and selling securities.

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Investment Banks in Pakistan
The investment banks vary from the commercial banks and the other retail banks is that,
investment banks do not take deposits however the commercial banks take deposits. Therefore
there is a great difference between these categories of banks, for this reason United states
have separated both kinds of banks. Following are the few investment banks in Pakistan:
NIB BANK
NIB Bank is one of the largest foreign banks in Pakistan in terms of its branch network and one
of the largest corporate entities of the country with a paid up capital of Rs. 103 billion. Through
an extensive network of branches spread across Pakistan, the Bank continues to serve its
customers for all their financial needs. The Bank’s resolve to provide world-class financial
products and services to the banking population of Pakistan is driven by its key business units
including Consumer Banking, Commercial Banking and Wholesale Banking.
NIB Bank is headquartered at the P.N.S.C. Building in Karachi. Six floors of this iconic building
serve as the nerve centre of our banking footprint in Pakistan.
NIB Bank started operations in October 2003 when National Development Leasing Corporation
(NDLC) and Pakistan operations of IFIC Bank were amalgamated. The Bank grew rapidly and
further acquisitions took place – the Pakistan operations of Credit Agricole Indosuez were
acquired in April 2004, and in 2007, PICIC Commercial Bank Limited merged with the Bank.
Temasek Holdings of Singapore continues to be the largest single investor in NIB Bank with a
stake in excess of 88%.
Investment Banking in NIB Bank
Following are the services offered by the NIB BANK
 Dept Capital Markets
Their team of specialists is dedicated to providing you with the best solutions structured
to your needs, from origination to distribution. Their experience and execution ability
are core strengths that have enabled them to win the trust of clients across the entire
spectrum of industries.

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 Merger & Acquisition and Equity Capital Markets Advisory
Their strength lies in our team of specialists who are focused on delivering superior
execution across various transactions. They focus on creating value and raising capital in
local and international markets. They provide M&A and valuation advice and also
provide access to local and international capital.
 Advisory services
They also offer some advisory services in matters like Privatizations, Financial modeling,
Equity issuances and listing, Equity placements and Project finance advisory for power
projects including renewable energy projects
 Mutual Funds
NIB Bank is distributing Mutual Funds managed by PICIC Asset Management Company, a
wholly owned subsidiary of NIB Bank. Currently we are offering PICIC Cash Fund and
PICIC Income Fund from selected branches.
PICIC Cash Fund PICIC Income Fund
Ideal for risk-averse investors. This fund is suitable for investors seeking
better returns with a calculated risk.
Mainly INVESTS in low risk portfolios of short
duration (primarily Government Bonds and
Bank Deposits) to provide competitive
returns.
The fund INVESTS in various medium to long
term fixed income instruments (Government
Bonds, Bank Deposits and Term Finance
Certificates) for greater potential.
No lock-in period, INVEST and redeem at any
time at the applicable Net Asset Value.
No lock-in period, invest and redeem at any
time at the applicable Net Asset Value.
Multiple payment options (monthly returns
or the option to re-INVEST) to meet
individual objectives
Multiple payment options (quarterly returns
or the option to re-invest) to meet individual
objectives.
Amazing Tax benefits for salaried and self-
employed individuals (as per tax laws)
Amazing Tax benefits for salaried and self-
employed individuals (as per tax laws)

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IGI Investment Bank
IGI Financial Services is a brand that represents strength, integrity and professionalism in the
non-banking financial services arena providing Insurance, INVESTMENT banking, Brokerage
and Asset Management under one umbrella. IGI Financial Services the brand, was established
as a collaboration of 3 companies; IGI Insurance, IGI Investment Bank and IGI Securities, each
independently pursuing excellence in their field of services under the leadership of the
Packages Group.
IGI INVESTMENT Bank provides a host of specialized products and services designed to meet
the financing needs of businesses throughout the country. Pakistan Credit Rating Agency
(PACRA) has awarded IGI INVESTMENT Bank’s long-term credit rating of ‘A-’ and short-term
rating of ‘A2’. With this credibility, IGI INVESTMENT Bank today stands as the
largest INVESTMENT bank in Pakistan with a paid-up capital of PKR 2.1 billion, being one of the
leading mutual funds distributor, as well as a trusted and credible advisor.
IGI Investment Bank deals with a wide variety of clients, including homeowners, small
businesses and many respected multinational corporations..
 Corporate Finance
IGI Investment Bank reinitiated its Corporate Finance Division in December 2005. The
Division’s activities are oriented to provide novel and innovative solutions to its clients
so as to assist them in successfully meeting the challenges of a dynamic market. The
service includes:
Arrangement and Advisory Service
Debt and Equity Private Placement of Debt and Equity
Listing of Debt and Equity Issues
Underwriting of new Equity and Debt Issues
Lease and Debt Syndications
Corporate Restructuring – Mergers/ Acquisitions and Divestitures
 Commercial Financing and Leasing
IGI INVESTMENT Bank is a progressive commercial financing company, providing its
customers with commercial loan financing as well as leasing products and equipment,
and advisory services.
The Bank’s lending, leasing and factoring products include direct lease, sale and
leaseback, short term loans, acquisition and expansion, and project financing.

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 Mutual Funds Advisory Service
Fund Select is IGI Investment Bank’s Mutual Funds Advisory Service; it has been
established to assist you in making informed decisions through different investment
strategies. These strategies offer attractive returns, choice, diversification, convenience,
liquidity, tax benefits and are handled by qualified professionals.
Fund Select is designed to help you build your personal portfolio and provides a clear
understanding of how the combination of different Mutual Fund Investment Strategies
can provide you with potential growth and peace of mind.
Investing through Fund Select carries minimum risk as compared to investing directly in
stocks and money market. Your money is simultaneously invested in various securities
thereby reducing your total risk that can arise if investments are made in just one kind
of securities.
CITI BANK
Combining some of the most respected brands in the financial services business -- the Global
Consumer Bank and the Global CorporateINVESTMENT Bank - are uniquely positioned to offer a
complete array of financial products. Citigroup operates in a global economic environment
which requires the expertise of a true market leader.
Citi is the pre-eminent INVESTMENT bank in Pakistan; their unparalleled Advisory credentials
and leadership position have been built up through consistent performance and delivery over
the past decade.
Their INVESTMENT Banking team provides comprehensive financial advisory and international
equity capital raising services to leading corporations (both in the private and public sector),
financial institutions and the Government. Clients receive strategic advisory services on a wide
range of transactions, which include mergers and acquisitions ("M&A"), financial restructurings,
project finance, underwriting and distributing of equity securities in the international markets.
 Merger & Acquisition Advisory
Citibank is the leading provider of financial advisory services in Pakistan. To date,
citibank has been actively involved in all major privatization deals, and have advised
leading foreign and local corporate groups. This can be evidenced by the number of
transactions undertaken by Citibank in the recent past.

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 Foreign Capital Market Transactions
Citibank is the leader in international capital market transactions for Pakistani issuers.
Through the development of innovative financial products and the ability to successfully
tap international capital markets, Citibank has raised long term financing in the form of
Global Depository Receipts ("GDRs"), Euro-convertibles and Floating Rate Notes ("FRN")
 Local Capital Market Transactions
Citibank has been the leading player in the syndicated loans business. It has nurtured a
diverse local investor base, demonstrated by its unmatched track record of raising
financing in excess of PKR 20 billion for the local market.
Citibank is also one of the leading players in the distribution business, which involves
arranging syndicates for Initial Public Offerings ("IPOs"), rights issues and distribution of
term finance certificates. As a result of its involvement in these transactions, Citibank
has achieved a clear understanding of the various complex regulatory, legal and
business issues that form an integral part of the capital markets business.
 Securitization
Securitization offers a strategic funding alternative, since it allows for the conversion of
assets, with strong cash flows, into a capital source. Citibank has pioneered both local
and foreign currency securitization transactions. It has completed local currency
transactions worth PKR 2.5 MMM. Moreover, Citibank successfully arranged the first
ever local currency future receivables securitization in Pakistan.
MEEZAN BANK LIMITED.
Meezan Bank Limited, a publicly listed company, was incorporated on January 27, 1997 and
started operations as an INVESTMENT bank in August that year. In January, 2002 in an historic
initiative, Meezan Bank was granted the country’s first full-fledged commercial banking license
as a dedicated Islamic Bank, by the State Bank of Pakistan.
Meezan Bank has developed an extraordinary research and development capability by
combining INVESTMENT bankers, commercial bankers, Shariah scholars and legal experts to
develop innovative, viable, and competitive value propositions that not only meet the
requirements of today’s complex financial world, but do so with world-class service excellence
which our customers demand; all within the bounds of Shariah.

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INVESTMENT BANKING IN MEEZAN BANK:
Realizing the increasingly diverse needs of our customers for advisory and structured finance
transactions, a specialized department focusing on INVESTMENT Banking services has been
established at Meezan Bank. The department is geared towards providing comprehensive and
innovative financial solutions through a diverse product offering, providing a broad array of
financing solutions to the bank’s clients. The focus is on nurturing and developing long-term
relationships with clients by understanding their unique financing requirements and providing
Shariah-compliant financing solutions.
In a short span of time, the INVESTMENT Banking department has been able to develop core
expertise in arranging syndicated, structured and Project finance and providing advice on
mergers and acquisitions, buy-side / sell-side advisory, financial restructuring, structured equity
and venture capital investments.
 Syndications & Structured Finance
Structured finance involves highly complex financial transactions. It is useful in cases
where standard financing products do not meet a company’s requirements.
MBL’s INVESTMENT banking department offers uniquely structured transactions for its
customers based on various modes of Islamic finance including Ijarah, Diminishing
Musharakah and Istisna.
 Project Financing
Project financing involves financing of long-term infrastructure and industrial projects.
These are non-recourse or limited recourse financings where project debt and equity
used to finance the project are paid back from the cash flows generated by the project.
Meezan Bank’s INVESTMENT Banking department has a proven track record of
successfully executing numerous Project Finance transactions despite its recent entry in
the financial market. Meezan also has the honor of being the pioneer in successfully
executing the first ever project financing transaction in the Islamic banking sector of the
country.
 Advisory Services
The INVESTMENT Banking department at Meezan Bank has recently set up a team to
handle its Corporate Advisory business. The department is currently strengthening its
existing expertise of providing Advisory Services by employing professionals to help the
bank’ customers decide the best financial approach for their businesses.

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Al Baraka BANK
With a vision for unrivaled services, dedication to Islamic principles of banking, increasing
network points, and innovative product line, Al Baraka Bank (Pakistan) Limited is committed to
the Banking Industry in Pakistan.
Al Baraka Bank (Pakistan) Limited (ABPL) is the result of a merger between Al Baraka Islamic
Bank Pakistan (AIBP), the branch operations of Al Baraka Islamic Bank (AIB) Bahrain and
Emirates Global Islamic Bank (Pakistan). The merged entity commenced operations on
November 1st 2010.
The merger, a first in the Islamic Banking sector in Pakistan, positions ABPL to play an important
role in further growing an industry which has witnessed tremendous growth over the last 12
years.
With assets in excess of Rs. 85 billion; a workforce of 1400 professionals and a network of 110
branches in 58 cities and towns across Pakistan, Al Baraka Bank (Pakistan) Limited is devoted in
providing customers with a range of Shariah compliant products to suit their banking needs.
Investment Banking
INVESTMENT Banking addresses the increasingly diverse needs of our customers for advisory
and structured finance solutions. The department is currently offering comprehensive and
innovative financial solutions covering corporate finance, oil & gas exploration, real estate,
trade management, capital and debt market products and international banking services.
The primary aim is to partner with our customers by suggesting practical, cost-effective tailor
made solution to make the most of the business opportunities that arise.
Following range of advisory and structured finance solutions help our customers in pursuing
their business strategies:
Advisory:
 Raising Funds
 Corporate Re-organization
 Infrastructure Development
 Mergers & Acquisitions
 Project Financing

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Structuring:
 Structured Finance
 Securitization
 IPO’s
Specialized Roles:
 Private Equity
 Trusteeship
 Access to regional financial markets through Al Baraka’s global network that spreads across
15 countries
Some other Investment Banks
Some of the other investment banks are
1. Standard Chartered Bank
To invest one’s income in the best place so as to get perfect profit is an important decision.
Standard chartered investment services helps its customers to invest the hard earn income.
This bank provides its perfect services to maximize the returns and to minimize its profits.
For the perfect return a customer can invest in the categories involving, fixed income,
government securities, mutual funds and the retail term finance certificates.
2. KASB Bank
KASB Bank also operates at its best in providing its services as investment banking. The group
concerned with investment banking serves as a trusted adviser to premier clients, which helps
in developing and achieving their strategic objectives and it helps them to achieve financial
needs. This bank provides its services in the following ways, merger and acquisitions,
privatization, corporate restructuring, project finance, debt servicing and many more.
3. Dubai Islamic Bank
With a professional team for the purpose DIBPL provides its perfect services in order to raise
their capital for the local and regional clients in the short span of time. This bank operates
under Shari principles therefore it is mostly preferred to all others. The investment banking

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team at the bank provides the services including Project finance, mergers and acquisitions
advisory, privatization advisory, real estate advisory, balance sheet restructuring, private
placements, syndication, sukkuk issuance.
4. JS Bank
JS bank investment banking group has been the pioneer of land mark transactions to the
domestic capital markets. It provides the following services, corporate finance advisory,
arrangement and placement of securities, trust and security services, underwriting, and
bankers to the issue.
With due efficiency the bank provides market leading investment banking services.
5. UBL
UBL Investment Banking Group which was established in 2002 is one of the most experiences
banking group in the field of investment banking and it is one of the largest banking group. The
specific attributes of the UBL is that it is consist of a specialist team of 19 investment bankers,
who have a very standard academic records and they have also experience in Pakistan as well
as in UAE.
Criticisms
The main criticism on investment banking is conflicts of interest. Potential conflicts of interest
may arise between different parts of a bank, creating the potential for financial movements
that could be market manipulation. Authorities that regulate investment banking require that
banks impose a Chinese wall whichprohibits communication between investment banking on
one side and research and equities on the other.
Since investment banks engage heavily in trading for their own account, there is always the
temptation or possibility that they might engage in some form of front running.