"Balance Sheet" Banks?
Hi all, so I've heard this term thrown around a lot and I have a vague but incomplete understanding of it. I'm sure other perspective monkeys may have this question, too.
What does balance sheet bank mean, which banks are they, and how exactly does this benefit their IBD?
JP Morgan is recognized as a balance sheet bank sometimes due to its famous "fortress balance sheet"- this allows the firm to win M&A mandates for mega deals due to its ability to offer the best financing terms on the street- thereby enticing the seller or buyer) to award the deal to JP. Obviously JPM combines its expertise in M&A alongside with its lending ability- which makes it a formidable competitor to EB which offer very good advisory.
Sometimes this term is also used for banks like Mizuho which mostly participate in the syndication process- taking a portion of the debt- they get some fees for this and its basically a loan. These types of banks dont do much M&A, and they dont run the syndication (not lead arranger like a JPM/BoA usually are)
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