Services Provided by Financial Conglomerates Carson Company is attempting to com

Question

Services Provided by Financial Conglomerates

Carson Company is attempting to compare the services offered by different banks, as it would like to have all services provided by one bank.

a. Explain the different types of services provided by a financial institution that may allow Carson Company to obtain funds or to hedge its risk.

b. Review the services that you listed in the previous question. What services could provide financing to Carson Company? What services could hedge Carson’s exposure to risk?

Explanation / Answer

(a) Investment management services: the term usually given to describe companies which run collective investment funds.Investment banking financial services focus on creating capital through client investments.

Private Equity and Mergers & Acquisition banks offer growth stage companies with advisory services to tap the private equity markets in the form of early stage funds through seed capital / angel investments, second stage capital through Private Equity Funds and in-organic growth or realignment through Mergers & Acquisition Advisory Services.

By issuing various debt services:

Debt: raise funds for their short term and long term capital requirements through working capital finance, corporate loans, working capital finance, external commercial borrowings and mezzanine finance. Banks arrange as per their client requirements funds both in domestic currency and Foreign Currencies. banks maintain relationship with a variety of domestic and foreign lending institutions helps us to serve their clients in best of their interest.

Stressed Asset Finance Banks assists Companies in stressed situations to arrange additional funding / partners to turnaround their operations and manage the cash flows in effective manner by restructuring of existing loans and additional credit facilities. Stressed Asset Finance helps borrowers to tide over difficult business situations such as business cycles and economic cycles.

Capital Market Services banks offer a wide range of Capital Market Services including initial Public Offerings (IPOs), Follow on Public Offers (FPOs), Rights Issues, etc for raising funds in the capital markets. Open Offers, Buy Back of Shares, Takeovers under SAST Regulations for restructuring requirements of listed entities.

Hedging risk techniques offered by banks:

Financial Derivatives

Financial Derivatives:
banks and financial institutions use financial derivative trades designed to mitigate risk and enhance portfolio performance.

Interest Rate Derivatives - Minimize exposure to fluctuations in interest rates and add stability to your portfolio.

Foreign Exchange Derivatives – Help reduce some of the risks of doing business globally, create an opportunity for enhanced revenue, and provide a level of flexibility unmatched by other hedging tools:

Interest rate fluctuations can devastate even the most brilliant business strategies.
there’s a way to protect your company with financial contracts designed to hedge against these risks.

Fixed Income Products - a number of hedging tools designed to reduce the interest rate volatility and subsequent risks associated with fixed income securities.

Interest Rate Options - Interest Rate Options allow you to invest based on your assessment of the future direction of interest rates.

Interest Rate Swaps - An essential tool to help your business manage risk, Interest Rate Swaps are an integral component of the fixed-income market.

(b) Services that provide finance to carson company are as follows:

capital market services like

Debt services like

Hedging services for carson's exposure to risk:

Interest Rate Derivatives - Minimize exposure to fluctuations in interest rates and add stability to your portfolio.

Foreign Exchange Derivatives – Help reduce some of the risks of doing business globally, create an opportunity for enhanced revenue, and provide a level of flexibility unmatched by other hedging tools:

fixed income risk management products

Interest Rate Options - Interest Rate Options allow you to invest based on your assessment of the future direction of interest rates.

Interest Rate Swaps - An essential tool to help your business manage risk, Interest Rate Swaps are an integral component of the fixed-income market.

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