Investment banking

What are investment banks?

Investment banks work with large organisations, helping them to raise capital investment, providing advisory services and access to the financial markets. The work of investment banks involves:

  • Market making: Creating liquidity in the financial markets by assuming the risk of holding shares of specific securities (e.g. shares or bonds) to help facilitate the trading of that security.
  • Mergers & Acquisitions (M&A). Advise clients on large scale mergers and acquisitions, or how to restructure to make their company more profitable.
  • Corporate events / new issues (eg IPO or Initial Public Offering): They help clients raise new capital by creating new securities (e.g. shares or bonds) and helping to creating demand for these. They also underwrite these in the event of smaller than expected sales.
  • Structuring products: Advise clients such as high street banks, pension funds or life insurance companies on creating financial products based on multiple types of investment.
  • Proprietary trading: They trade the markets using the bank's own money, looking to make a profit for the bank.

Who are the investment banks?

Investment banks are generally split into the largest banks (often known as the ‘bulge bracket’ banks), middle market, and smaller boutique banks, who may specialise in particular services.

  • Larger banks include Goldman Sachs, Morgan Stanley, JP Morgan, Bank of America Merrill Lynch, Citi, Barclays, Deutsche Bank, HSBC and UBS.
  • Middle market banks include, BNP Paribas, Nomura, Royal Bank of Scotland, and RBC Capital Markets.
  • Smaller boutique banks include Rothschild, Lazard, Blackstone, First Capital, Investec and many others.

Some banks are also conglomerates, including investment banking among other services that they offer such as commercial banking, retail banking or insurance. Such banks include Macquarie, ABN Amro, Standard Chartered Bank, Société Générale, RBS and Lloyds Banking Group.

Jobs and roles in investment banking

Roles are divided into different areas, and were often known as front, middle and back office, though these terms are used less today. An excellent introduction to different areas and roles within investment banking is The Unofficial Guide to Banking.

Getting experience and getting in - It’s important to start early

In your first year: You can begin to explore the firms, the vocabulary and the roles.

  • Look for First Year Spring Insight opportunities as many of the banks offer them. Apply in the autumn of your first year.
  • Join a relevant student society to gain greater knowledge about the sector, eg MUTIS (Manchester University Trading & Investment Society).
  • You could start virtual trading online to build your awareness of how the markets work, for example Virtual Trader or Investopedia Simulator. There are also many mobile apps you can download.
  • Start following the financial news and familiarise with the terminology of investment bankind. See resources below.

In your second/penultimate year:

  • Apply for summer internships. Internships are very important as many firms recruit the majority of graduates from their previous year’s interns. Apply in early autumn as many vacancies close by end of October or November.
  • Attend careers fairs and employer presentations in October and November to find out more about the banks and make contacts
  • Contact alumni via LinkedIn. Some of our alumni work in investment banking and related areas, and they can be a great source of advice and information on getting into banking.

In your final year:

  • Apply to graduate schemes early. Closing dates are as early as the end of October. Make a schedule of closing dates and to apply to firms as soon as you can. Try, banks’ own websites and CareerConnect.
  • Attend careers fairs and employer presentations during the autumn to understand the banks and make contacts.

The Application process

Investment banks follow a similar process to many other large graduate recruiters. See Applications and Interviews for advice on preparing. See also our advice specific to investment banking:

  • 1 page CVs - Some banks (particularly US banks) prefer CVs to be a maximum of 1 page, rather than the UK norm of 2 pages.
  • Most interview questions will be of a standard type, such as why you are interested in that bank or that role, and being able to give examples of skills you used.
  • Technical and brainteaser questions are used in some interviews to test your knowledge of the markets and ability to think quickly under pressure. Examples of questions are: the relationship between interest rates and bond prices, how the FTSE is trading today, how to value a company, or how many red cars are there in the UK? See resources below to help you prepare.


Understanding the investment banking sector

Interview Questions

Understanding finance and banking terminology

  • Investopedia A great resource to better understand the terminology and concepts used in the investment banking industry
  • Money Week A Youtube channel with videos explaining concepts used in banking and investing.
  • Finimize An app for your smartphone which helps you keep up to date with Todays’ financial news in under 3 minutes