Leading merchant banks include J.P. Morgan (JPM), Goldman Sachs (GS), and Citigroup (C). Like investment banks, many also have commercial and retail operations that serve individual consumers and small to mid-sized businesses.

Example of Merchant Banking Let's say Company ABC–based in the United States—wants to buy Company XYZ in Germany. ABC would hire a merchant bank to facilitate the process. That bank would advise Company ABC on how to structure the transaction. It may also help ABC in the financing and underwriting process.

To illustrate the role of a merchant bank, suppose a multinational corporation XYZ is considering the purchase of a smaller company in another country. Company XYZ will likely solicit the services of a merchant bank for advice on how to best approach the acquisition process.

Examples of Merchant Bank The world-renowned underwriters normally comprise Macquarie, JP Morgan, Citigroup, and Goldman Sachs. Small companies who wish to acquire finance either through debt or equity can get in touch with any one of the merchant bankers.