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Do You Need an MBA in Investment Banking? Find out Here

Investment banking is the most sought-after career in recent times, turning out to be a high-paying profession for individuals who go down this path. Thus, similar to other highly demanded services, there is bound to be competition. To start your career in investment banking, you’ll need the right amount of knowledge, skills and motivation to take up any challenge ahead of you. Generally, applicants pursuing an investment banking course at a reputed institution can qualify with a Bachelor’s degree in any business-related field, but most employers prefer an MBA. So, can an MBA in Investment banking get you places?

DO YOU NEED AN MBA IN INVESTMENT BANKING-compressed

Table of Contents:

  • What do Investment banks do?
  • Role of an Investment Banker
  • What skills are required for Investment Banking?
  • How can you become an Investment Banker?
  • What is the difference between Private sector and Public sector banks in India?
  • Is an MBA in Investment Banking necessary?
  • MBA in Investment Banking: Scope
  • Frequently Asked Questions
  • Conclusion

What Do Investment Banks Do?

In a nutshell, Investment banks are a specific segment of the Finance and Banking industry. Investment banks manage all banking operations and assist clients in raising funds and completing important financial transactions.

Investment banks occupy an important part in the finance industry, thus their services such as Underwriting for clients, Mergers and Acquisitions and Market-making, play a crucial role in framing modern economic norms.

Investment banks provide multiple job roles in Finance, Mergers, Asset Management or Trading. Therefore, with the right degree you can have a plethora of job roles to choose from.

Role of an Investment Banker

Investment bankers function as financial counsellors to firms and, in certain situations, governments. They assist their clients in raising funds, which could include issuing shares, negotiating the acquisition, or coordinating the sale of the company itself.

Investment bankers perform better when the capital markets are performing favourably. Usually, more activities and funds result in lucrative projects for investment bankers and their clients. Some responsibilities that you have to perform as an investment banker are as follows:

Organising Private Placements –

You may need to assist customers who choose to raise funds through private placements, instead of bond markets or stocks. In these circumstances, as an investment banker, you can anticipate the contacts and credentials necessary to seal the deal.

Underwriting Services

You will often get responsibilities for underwriting projects for clients when arranging Capital Market finance. This entails taking up the majority of the risk involved in purchasing the shares directly from the issuers and selling them to the institutional buyers. Usually, a lead investment banker collaborates with a syndicate of investment bankers, to spread the risk across numerous parties.

Mergers and Acquisitions Deal

In most cases, merging and acquiring with a different organisation involves a lengthy process of preparation and negotiation. You will play the role of an advisor in this process, especially when it comes to determining a reasonable price for transactions.

Equity Financing

Selling bonds or shares is the most cost-effective way for firms to finance their growth and expand. When it comes to organising the sale of Stock or Equity Financing, you would have a major role to play. Throughout the entire process, your role as an investment banker takes the lead.

With an MBA in Investment banking or a professional course, you get extensive knowledge of these responsibilities along with practical skills.

What Skills Are Required for Investment Banking?

While many of the qualities that employers seek in candidates are evident, few are surprising. Some qualities are hard to measure and end up suggesting that the individual is cut out for a career in Investment Banking than other applicants. There are skills that you naturally have in you, that qualify you as an investment banker, while other necessary skills are learnt through training programs or comprehensive courses like an MBA in Investment banking fields.

Creativity:

Despite the rigour and structure of investment banking, innovative thinking and creativity are highly valued qualities. Professional bankers, with this quality, can easily approach a problem or give solutions in unconventional ways. In Investment banking, for example, they can think of ways to open up new markets for services and products. This trait has an intangible quality, that encourages people to approach the subject from a different perspective. A proper degree in Economics, business or some extracurricular classes on social science, can lay the groundwork for innovative ideas. Although, creativity is something that can come naturally to you.

Relationship-building:

If you are working in any professional field, this skill is regarded as crucial. Not having a respectable demeanour or approach can be deemed as something unprofessional. Investment Bankers should have social skills, enabling them to deal with different people in extreme situations while keeping their positive energy intact. Therefore, having a good set of interpersonal skills can help you get more clients and retain them.

Networking:

Creating professional contracts and lies is important for every organisation. Thus, maintaining a positive approach with colleagues allows you to enhance your future chances. Good connections with important clients and other industry professionals, not only boost your confidence but help to showcase the organisation’s work. You will be able to reach clients more efficiently and an international outlook does not restrict clients geographically.

Open-mindedness:

This is a necessary trait that is especially important in recent times. The world is globally connected in all spheres, making it possible for businesses to function with a better grasp of society and culture. With this and communication abilities, you can make your profession flourish.

Time Management:

It is a universal fact that managing time is crucial and one should always be careful with time. If you’re pursuing an MBA in Investment banking or doing an internship, your time-management skills would save you in many ways. As an Investment banker, achieving project deadlines must be appropriately scheduled, so that best results are obtained. You should start by creating a simple timetable for the day and try to fulfil every goal mentioned. This little habit can help you in your professional life.

Problem-solving Skills:

This ability enables an investment banker to be innovative and address a situation optimally. Finding solutions is more straightforward, and the most difficult parts can be solved with fewer resources. So, when faced with complex solutions, investment bankers with good problem-solving skills can handle them with minimum resources and costs.

Analytical Skills:

Experienced Investment bankers can critically analyse data or explore every viewpoint to foresee the outcomes of their decisions. They have to make sure that their judgement is not tainted by misleading information so that they can provide appropriate counsel to their clients. Analytical skills can be learned through investment banking courses or internships with a practical approach.

Check This If You Are Interested In Investment Banking Courses:

 

How Can You Become an Investment Banker?

Investment banking is a great career option for the future. So, if you have the skills mentioned above you’ll likely prosper in this domain. But firstly, you’ll need your qualifications and knowledge to back you up. Let us check out the ways, which can aid you in becoming an investment banker.

Earning a Bachelor’s Degree:

There are several BA degrees one could pursue, but mainly a Bachelor’s in Finance, Business, and Economics are preferred for investment banking applicants. Students with BA Finance degrees learn to make financial analyses and projections effectively. Furthermore, evaluating financial statements and a general understanding of financial markets are taught to them. They also learn soft skills in business, such as networking for financial sales.

Entry-level Jobs:

Along with earning degrees, you should strive to gain practical experience. Putting what you learn into a real-world scenario helps you improve your prospects. It has been observed that the majority of investment bankers begin their careers as investment analysts and an average entry-level salary is around $67,800. Investment banking with high bonuses can increase the overall payment. These analysts usually work for a few years before seeking higher studies or a promotion. Thus, students should carefully evaluate the total salary and prospective promotion opportunities.

Pursuing Higher Studies:

To transcend investment banking, most students prefer to take up higher studies like an MBA in Investment Banking. Although students can qualify for a job in this field with only a Bachelor’s degree in any of the finance-related subjects, obtaining a higher position could get tough. It is logical to invest in higher studies, as most high-level positions in the field of investment banking require you to hold a Master’s degree.

Getting Recruited:

After obtaining a Master’s degree, most applicants enjoy a very standardized progression path in their career. It enables them to rise in the hierarchy and these investment bankers become Associates, Vice Presidents and Analysts.

In India, becoming an Investment banker requires you to keep a few things in mind. The positions here are divided into the Private and Government sectors.

Private Sector:

In this case, a Bachelor’s degree or B.Com is the minimum qualification needed for investment banking organisations in India. Most recruiting companies determine the exact qualifications needed and a B.com degree in Business, Corporate English, Accounting and Economics is preferred. Although, similar to what was previously stated a Master’s degree is needed for advancing to higher positions.

Graduating from a reputed university like the Indian Institute of Management (IIM) gives you a career boost. An MBA in Investment banking or Finance, are two prominent degrees provided by universities. Moreover, private banks prefer to offer jobs to students with the degrees mentioned, either through tests or interviews.

Government Sector:

In Government banks, an all-India entrance exam is given importance, from which departments are assigned to officials based on qualifications. Investment bankers don’t undergo a specific recruitment process and no prerequisites are required for taking tests. An example of a government body for this purpose is the Public Debt Management Cell, where recruiting is done through the Public Service Commission.

Check These Prominent Investment Banking Courses Near You That You Should Not Miss:

What is the Difference Between Private Sector and Public Sector Banks in India?

The private banks in India were established after 1990. Before that, the government banks were the primary stakeholders. Currently, both these sectors contribute significantly to the economy of the country. Depending on their needs and preferred level of service, consumers select between private and government sector banks. Presently, India has 12 government banks and 21 private banks. Some differences in their workings are listed below:

Public Sector Banks –

These hold majority stakes and are owned by State or Central governments. More than 50% of the shareholding in government sector banks, lies with the government and the consumer base is pretty high. The interest rates in these banks on savings are lower than in loans. Employees on average have higher job security at public sector banks and they are more trusted by consumers and employees alike. In the context of Foreign Direct Investment, public sector banks allow you a 20% investment rate. Pensions are also provided by them, examples of government sector banks in India are SBI, Union Bank, PNB etc.

Private Sector Banks –

The banks whose stakes are held by private companies or individuals are known as Private sector banks. These banks have to be registered under the Indian Companies Act (ICA) and their majority stakeholders lie with private companies. They have a comparatively low consumer base even though they offer more interest on savings than loans. Private banks, however, provide lesser job security and are not as popular as their other counterparts. Private sector banks allow Foreign Direct Investment at a high rate of 74%. Although, a single individual or organisation can invest only up to 10% stake in the bank. These banks do not have a concept of Pension for their employees. Some examples include ICICI, HDFC Bank, Axis Bank and Karnataka Bank.

According to Somra, Nikita (2023) the study of HRM practices in these Private and Government sector banks in India, globalisation resulted in government sector banks facing strong competition from Private banks. They have recognized the significance of modern human resource management strategies, which were mostly used by Private banks. The analysis was based on the original data from two Indian banks, belonging to the government and private sectors. The HRM practices were categorized into development and training, performance appraisal, employee retention and compensation.

The bank’s customer service is important since it provides services through its employees, enabling them to connect with their clients. Nowadays, banks have started competing directly with each other, facing challenges in many areas like scarce resources, energy and power, or innovation in technology. The employees are protected by procedures intended to improve their efficiency and outcomes. These included areas of safety, welfare, performance appraisal and training. Thus, this study determined the extent to which Human Resource Management contributed to employee pleasure at the two banks.

Is an MBA in Investment Banking Necessary? Let Us Learn Further,

Realistically speaking, it is not necessary for entry-level investment banking but is preferred by top investment banks. An MBA in Investment banking carves out an easier path to getting recruited for higher positions. An average person who aspires to be an Investment banker is oblivious to the effort required, to thrive in the industry. With enough motivation and hard work, you can build solid social and financial skills that go well in this domain.

An Investment banker’s job is fast-paced and often requires diverse knowledge. There is a lot that goes into being a good Investment banker, ranging from networking with customers and industry experts to studying and executing intricate financial analyses. So, an MBA in Investment banking improves your possibility of getting recruited by top investment banks in the country, but that perspective varies for different individuals.

MBA in Investment Banking: Scope

Becoming an investment banker from a global perspective includes MBA programmes from business schools which prepare you for the job. Investment bankers assist businesses in raising capital by aiding Mergers and Acquisitions, Selling stocks or bonds, arranging Sales and advising certain businesses to go public. MBA programmes offered by top universities, in fields like Statistics, Accounting, Finance or Investment management are held in high regard.

We Also Insist To Check This Investment Banking Courses Abroad,

List of Universities That Offer Top-quality MBA Programmes in India –

IIM Bangalore:

This institute was founded in 1973 and has its headquarters in Bangalore. It has a faculty of 110 full-time working members and about 1,200 students across various degrees. The institute has a good reputation and maintains partnerships with various big Investment banking firms. Aside from that, they collaborate with Kotak Bank for women entrepreneurship and NITI Aayog for scaling up new ventures.

Mba Programmes to Check Out:

  • One-year Master of Business Administration
  • Two-year Master of Business Administration
  • Two-year Master of Business Analytics

IIM Calcutta:

It is another branch of IIMs, which has its campus located in Joka, Kolkata. This branch is one of the premier management institutes and is ranked among the top business schools in the world. Moreover, it has many accreditions, one of them being the Association to Advance Collegiate Schools of Business. The types of Academic programmes are Doctoral Programmes, MBA, MBA Executive programmes and CEMS MIM programmes.

The institute provides an MBA in investment banking inclusive of Internships and Placements.

Amity University:

Amity University, Noida is a private research university that was founded in 2005, by an Act of the State Legislature of Uttar Pradesh. It believes in setting an example of global education, with a system that matches the best practices. To date, the institution expanded itself across more than 1centresers, offering over 300 educational programs.

The Master of Business Administration (MBA) programme at this institute has an organised structure. The course is provided in an online platform, spanning a duration of 2 years, at least 12-15 hours per week. It is accredited by EOCCS and has been India’s only online MBA course to be ranked globally in 2022 by QS. You are also given placement assistance.

SPJ Institute of Management and Research:

This institute is a private non-profit management school located in Mumbai and founded in 1981. The institute is well-reputed for producing top-quality graduates and the impact they can bring. For over 40 years, it has combined unique mixes of social sensitivity, teaching excellence, community engagement and industry connectivity through its education programmes in India. It seeks to promote responsible innovation that generates value-based growth for the benefit of society.

You will be able to find several programme structures such as Postgraduate, Executive Education, Doctoral and Entrepreneurship. These have proper categories of Investment banking certificate courses to choose from.

Few More Investment Banking Courses That Are Top Rated:

Frequently Asked Questions:

Q) What are the advantages of studying MBA in Investment Banking?

If you are inclined towards expanding your knowledge with an MBA in Investment banking, there are certain skills that you could take away. You become a top candidate for recruitment with skills like excellent networking. A higher position can guarantee you an excellent salary, benefit packages, and job security, while also opening up several other opportunities for you to grasp.

Q) Why is investment banking a great career?

Investment Bankers become successful after a lot of hard work and that gives them a chance to enjoy the fruits later on. They can expect a higher salary than their peers, and more networking opportunities with customers and industry professionals while playing a visible role in accomplishing companies. But to become an Investment banker, you’ll have to pour in more effort than ever and build exceptional skills so that standing out won’t be a problem.

Q) Can investment banking be automated?

Since digitalisation is progressing, the Investment banking domain has no reason to back away from it. In short, yes, automation and AI technologies are used in Investment banking, to some extent. However, this hardly impacts the actual role of an Investment banker. Automation in certain spheres is needed to improve processes that include Research and Analysis or Data-entry and Report generation, helping investment bankers to focus on more necessary issues. Many large firms have adapted to using automated technologies in their work processes.

Conclusion:

We believe this blog cleared all your queries about an MBA in Investment Banking. If you want to pursue a career as an investment banker, we highly recommend you check the Investment Banking Course by IIM SKILLS. They are the leading educational platform that has proved best for investment banking courses worldwide. For more information click here [email protected].

 

I am Meghna Kanjilal, an Education honours graduate from Loreto College with a passion for reading books. I like being creative whether it's through writing or designing. I had an amazing opportunity to start my writing journey with IIM Skills and expand my knowledge in the Content Writing domain. Currently, I am working with IIM skills on their internship programme to enhance my skills and gain experience.

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