What Is Corporate Banking?

Corporate banking provides mid-size and large corporations with customizable financial solutions. Discover the difference between corporate banking and retail banking.

Corporate banking provides complex, often customized financial solutions, such as lending options and risk management, to corporate customers, such as companies and institutions.

Corporate banking is for larger enterprises

Corporate banking services are complex, integrated with other segments of the bank and typically offered on a large scale (such as asset-based loans ranging from $2 million to more than $1 billion). That complexity is designed to meet the needs of mid-size and large-scale businesses, including those with a global reach.

Corporate banking often provides large clients with both services and a close relationship with banking specialists, who can cater to unique needs and risk profiles.

Common corporate banking services

Services typically offered through a corporate bank account include:

Credit

Depending on their needs or credit rating, businesses may require different types of credit tailored to their industry or market opportunities. Corporate banking teams often work with institutional clients on customized credit solutions, such as:

Operating or revolving lines of credit.
Derivative hedging products.
Bridge or acquisition financing.
Real estate financing.
Leveraged finance or leases.

Treasury services

Corporate banking also provides large clients with cash management services such as tracking payments and running transaction reports.often done in conjunction with a company’s treasury activities, liquidity management, accounts payables and receivables, cross-border banking and corporate card services.

Fixed asset financing

Corporate banking teams also provide institutional clients with asset-based loans and lines of credit, where the bank advances a certain percentage of appraised inventory value or provides financing based on specific accounts receivable or invoices.

Sustainable finance

Responsible investing and environmental, social and governance (ESG) investing are the focus of many companies and investors.

Corporate banking often approaches investing, lending, advisory services and public offerings with a sustainability focus by including solutions like sustainability-linked loans, ESG strategy, and green, social and sustainable finance bonds.

Global trade

Corporate banking teams can also assist clients with international trade via import/export and supply chain financing, facilitating payment verification across global markets, and helping with risk mitigation by reviewing the payment terms of international contracts.

What’s the difference between corporate banking and commercial or business banking?

Terms like “corporate” and “commercial” may sound like they apply to all companies. But corporate banking services — such as treasury management, asset-based lending, capital markets or bridge financing — are geared toward the needs of large companies with a domestic or global focus.

Commercial banking

In contrast, business or commercial banking services are designed for smaller and mid-size firms, providing them with day-to-day chequing, loan, payroll, investment and credit solutions separate from their owners’ personal banking.

Business banking

Business banking options allow multiple individuals to access and manage a company’s financial information and transactions.

Similar to services for corporate banking clients, but on a smaller scale, commercial banking services often include access to a range of options depending on the customer’s size and sector. Commercial banking may also provide a relationship manager to help businesses navigate their borrowing, banking or investing options.

Retail banking products — those you use for personal banking rather than for your business — are offered on a much smaller scale, as they are designed for individual customers rather than for large corporate clients.

Retail and personal banking include products like:

Savings and chequing accounts.
Tax-free savings accounts (TFSAs).
Mortgages.
Lines of credit.

With corporate banking, specialists support businesses with financial service offerings like lending, financing and trade solutions. Investment banking teams, however, help firms with strategic transactions by providing advisory and capital-raising solutions, such as mergers and acquisitions, management buyouts and divestitures.

Corporate and investment banking can often fall under the same “capital markets” banner, or alongside equity capital markets and debt capital markets teams.

In Canada, the capital markets or securities divisions of the Big Six banks, such as TD Securities, BMO Capital Markets, RBC Capital Markets, Scotiabank Global Banking and Markets, and CIBC Capital Markets, all offer corporate banking services, often in partnership with their investment banking and global markets teams.

Several multinational banks based in other jurisdictions (known as Schedule II and Schedule III banks) also offer corporate banking services in Canada, including Mitsubishi UFJ Financial Group (MUFG) Americas and Wells Fargo.

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