What Is the Financial Institutions Group (FIG) in Investment Banking?

Search Fintrev

Search our guides, reviews and glossary.

A financial institutions group (FIG) is the industry team inside an investment bank that advises and raises capital for financial companies: commercial banks, insurers, asset managers, brokerages and specialty lenders. In FIG investment banking, the client’s own balance sheet is the product. That changes how deals are valued, regulated and structured compared with advising an industrial or consumer company.

How a financial institutions group works

Structure and coverage

Most FIG teams sit within a large investment bank next to other industry groups such as healthcare, technology, energy, real estate and industrials. Some boutique advisory firms specialize in financial institutions entirely.

Larger banks often split FIG into sub-teams that match client segments, for example:

• Depository institutions (commercial banks, regional banks, savings institutions)
• Insurance (life, property and casualty, reinsurance, brokers)
• Asset and wealth management
• Specialty finance and fintech (consumer lenders, payments, mortgage companies)

These sub-teams give bankers deeper knowledge of each segment’s regulation and economics.

Services

A FIG team typically handles:

• M&A advisory: bank mergers, insurer acquisitions, sales of asset management businesses or divisions
• Equity capital raising: IPOs, follow-on offerings and private placements
• Debt financing: senior debt, subordinated debt and other instruments that can count toward regulatory capital
• Capital structure optimization: balancing capital ratios, leverage and shareholder returns
• Restructuring and recapitalization: when an institution’s capital or liquidity comes under pressure

Why FIG work differs from other industry groups

For a manufacturer, debt is financing. For a bank, deposits and borrowings are raw material: the bank earns the spread between what it pays on funding and what it earns on loans and securities. Because interest expense is part of operations, metrics that separate operations from financing, such as enterprise value and EBITDA, lose most of their meaning. A standard unlevered DCF discounted at WACC runs into the same problem.

FIG bankers therefore value financial institutions on an equity basis:

• Price to book value (P/B) or price to tangible book value (P/TBV)
• Price to earnings (P/E)
• Return on equity (ROE), which helps explain why one bank trades at a higher multiple of book than another
• Dividend discount models, with cash flows constrained by the capital the institution must retain

Regulation shapes every deal. Banks must hold minimum capital against risk-weighted assets, insurers must meet solvency requirements, and acquisitions usually need regulator approval. FIG bankers have to model how a transaction changes the combined company’s capital ratios, not just its earnings.

Example: a hypothetical bank acquisition

Hypothetical figures for illustration only.

Bank A wants to buy Bank B. Bank B has tangible book value of $400 million and earns $48 million a year, an ROE on tangible equity of 12%.

• An offer of 1.5x tangible book values Bank B’s equity at $400 million × 1.5 = $600 million.
• That price equals 12.5x earnings ($600 million ÷ $48 million).
• If Bank A pays partly in cash, the FIG team checks whether the buyer’s capital ratio stays above its regulatory minimum after the deal.
• The team also measures “tangible book value dilution”: how much the buyer’s tangible book per share falls at closing and how many years of added earnings it takes to earn that dilution back.

Assumptions: book value equals tangible book value at closing, and no fair value adjustments to Bank B’s loans. In practice, marking loans and securities to fair value can move the price materially.

How FIG teams make money

A FIG earns revenue the same way other investment banking groups do: advisory fees on M&A and restructuring work, usually paid largely on completion, plus underwriting fees on equity and debt offerings. Unlike its bank clients, which earn the spread between cheap funding and higher-yielding loans, the advisory group does not run a lending book.

A notable FIG deal: UBS and Credit Suisse

In March 2023, UBS agreed to acquire Credit Suisse, a Swiss bank with 167 years of history, for about $3.2 billion. The deal came together over roughly 48 hours as Credit Suisse neared collapse, with FIG advisers from JPMorgan and Morgan Stanley working with UBS. It ranks among the most significant banking acquisitions since the 2008 financial crisis.

FIG as a career

Large banks such as Goldman Sachs, Morgan Stanley and Wells Fargo run dedicated FIG divisions, and analysts typically arrive with strong finance backgrounds through bank training programs.

Pros

• A steady client base and generally active deal flow
• Exposure to complex balance sheets and capital management
• Valuation and regulatory skills that are hard to acquire elsewhere
• Compensation in line with investment banking pay

Cons

• Long hours and technically demanding work
• Regulatory knowledge has a steep learning curve
• Deals can move slowly through approval processes
• Specialization can make moves to generalist roles or other industry groups harder

Limitations and common confusions

• FIG is not a product group. It covers an industry. The M&A or capital markets groups often execute the actual transaction alongside FIG bankers.
• FIG is not institutional or corporate banking. Those divisions lend to and serve clients day to day. FIG advises on strategic and capital transactions.
• “FIG” can mean other things. Outside investment banking, the acronym appears in company names, including insurance marketing firms, and in “FIG fixed income,” which refers to bonds issued by financial institutions. Context decides the meaning.

The Bottom Line

FIG work matters to financial companies planning mergers, capital raises or recapitalizations, and to people weighing an investment banking career. Because a financial institution's balance sheet is its product, FIG bankers value deals on price to book, earnings and return on equity, and they model regulatory capital at every step. Candidates gain rare valuation and regulatory skills but should expect long hours, slow approvals and harder moves into generalist roles.