What Is FIG Investment Banking?
FIG — short for Financial Institutions Group — is an investment banking coverage group that advises banks, insurance companies, asset managers, broker-dealers, specialty finance companies, and other financial services businesses on M&A and capital markets transactions. It’s one of the most technically distinct groups in investment banking, with unique accounting, regulatory considerations, and valuation approaches that set it apart from every other coverage group.
I’ve coached students into FIG groups at bulge bracket banks and elite boutiques, and the one thing I always tell them is this: FIG is a group where specialized knowledge is a genuine edge. The students who come in knowing how bank financials work, what a tangible book value multiple means, and how capital requirements affect M&A structuring are the ones who land the offers.
This guide will give you a thorough understanding of what FIG banking is, how it works, and how to break in.
What Do FIG Investment Bankers Work On?
FIG bankers advise on the full spectrum of capital markets and strategic transactions for financial institutions. Here’s what that looks like in practice:
Bank M&A
Bank mergers are the lifeblood of FIG advisory. Community bank consolidation has been a consistent theme for decades — there are thousands of small regional banks in the U.S., and the economics of banking increasingly favor scale. FIG bankers also work on major bank mergers (think the JPMorgan/Bear Stearns and Bank of America/Merrill Lynch transactions during the financial crisis, or more recent deals like the M&T Bank/People’s United merger).
Insurance M&A and Advisory
Insurance is a massive sector within FIG. Life insurance, P&C insurance, reinsurance, specialty insurance — all generate significant M&A activity. Insurance mergers are structurally complex, involving actuarial assumptions, reserve adequacy analysis, and regulatory approvals from multiple state insurance commissioners.
Capital Raises for Financial Institutions
Banks and insurers regularly access capital markets to maintain regulatory capital ratios. This means equity offerings, preferred stock issuances, and subordinated debt deals. Post-stress-test results each year, there’s often a wave of capital activity as banks recalibrate their capital structures.
Asset Management and Fintech Advisory
Many FIG groups have expanded to cover asset managers (BlackRock, Vanguard, Fidelity, smaller RIAs), insurance asset managers, fintech companies, and payments businesses. This is one of the most dynamic parts of FIG right now — payments and fintech M&A has been enormous.
How Are Financial Institutions Valued? The FIG-Specific Technicals
This is where FIG gets genuinely interesting — and where the learning curve is steepest. Financial institutions are valued differently from almost every other industry because their financial statements are structured differently.
Why You Can’t Use Enterprise Value for Banks
For a typical company, you separate the capital structure (equity and debt) from the operating business. But for a bank, debt (deposits, borrowings) is the raw material of the business — it’s funding, not just capital structure. This means traditional EV-based multiples don’t apply. Instead, you value banks on an equity value basis.
Price-to-Book (P/B) and Price-to-Tangible Book (P/TBV)
The most fundamental bank valuation metric. Book value represents the equity on a bank’s balance sheet — assets minus liabilities. Tangible book value strips out intangible assets (primarily goodwill). P/TBV multiples tell you how much premium (or discount) the market is paying over the bank’s net asset value. This is the anchor for most bank M&A negotiations.
Price-to-Earnings (P/E)
Banks are also valued on earnings. P/E multiples for banks reflect expectations about return on equity (ROE), earnings growth, and credit quality. A bank with a 15% ROE deserves a higher multiple than one earning 8% ROE.
Dividend Discount Model (DDM)
Because banks are constrained in how they can deploy capital (regulatory capital requirements limit growth), the DDM is commonly used in FIG — particularly for mature, dividend-paying banks and insurance companies.
Key Bank Financial Metrics
- Net Interest Margin (NIM): The difference between interest earned on loans and interest paid on deposits. A core driver of bank profitability.
- Return on Equity (ROE) / Return on Tangible Common Equity (ROTCE): How efficiently a bank generates earnings from its equity base.
- Efficiency Ratio: Non-interest expense divided by revenue. Lower is better — a 55% efficiency ratio is good, 75% is poor.
- Common Equity Tier 1 (CET1) Ratio: The primary regulatory capital ratio. Banks must maintain minimum CET1 ratios set by regulators; this constrains M&A and capital return.
- Non-Performing Assets (NPAs) / Net Charge-Off (NCO) Rate: Measures of credit quality — how much of the loan book is going bad.
These concepts can seem overwhelming at first, but they click once you spend time with actual bank financial statements. Our technical cheatsheet covers the FIG-specific metrics you need to know for interviews.
Top Banks for FIG Investment Banking
Bulge Bracket FIG Groups
Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America, Citi, and Wells Fargo all have large FIG practices. JPMorgan’s FIG group is consistently one of the most active, given the bank’s own size and connectivity throughout the financial services industry.
Elite Boutiques
Sandler O’Neill (now Piper Sandler) built its entire franchise on bank M&A advisory and remains one of the most respected names in bank advisory. Keefe, Bruyette & Woods (KBW, part of Stifel) is another powerhouse in bank and insurance advisory. Lazard, Evercore, and Guggenheim also have strong FIG practices.
FIG vs. Other Coverage Groups
Students sometimes ask whether FIG is a “good” group or a “dead end.” My honest answer: FIG is one of the best groups if you’re interested in financial services, and the technical learning is genuinely differentiated. The knock on FIG is that exit opportunities are more narrowly focused on financial services — you’re less likely to land at a generalist PE shop than someone who came from a TMT or healthcare group. But if financial services PE, insurance-focused PE, or fintech investing interests you, FIG is an incredible foundation.
Exit Opportunities from FIG Investment Banking
- Financial Services Private Equity: Firms like Warburg Pincus (financial services team), GTCR, Stone Point Capital, and Aquiline Capital Partners recruit heavily from FIG.
- Insurance-Focused PE: Carlyle’s insurance platform, Blackstone Insurance Solutions, Apollo Global (a major insurance investor via Athene), KKR — the insurance PE space has exploded.
- Fintech / Payments PE and Growth Equity: FIG bankers who covered payments and fintech are highly sought after by funds investing in those spaces.
- Hedge Funds: Financial services-focused long/short equity strategies are a natural fit for FIG alumni.
- Corporate Development at Financial Institutions: Banks, insurers, and asset managers all have internal M&A teams that hire from FIG.
How to Break Into FIG Investment Banking
Develop Genuine Interest in Financial Services
The number one thing FIG bankers screen for is authentic interest in the sector. They’ve heard “I’m interested in the complexity of bank regulation” from a thousand candidates — you need to back it up with specific knowledge. Know the current issues: Basel III capital requirements, rising interest rate dynamics, bank consolidation trends, insurtech disruption, the growth of insurance-linked securities.
Learn the FIG Technicals Early
Start reading bank and insurance company financial statements. Understand the income statement (net interest income, non-interest income, provision for credit losses), balance sheet (loans, deposits, securities), and the capital ratios. This is work that will immediately differentiate you from candidates who show up knowing only generic DCF and LBO theory. Check out our free resources for study materials.
Network with FIG Bankers
FIG groups are tight-knit. Getting to know analysts and associates in the group before recruiting season is enormously valuable. Ask them about deal flow, what they find most challenging about FIG accounting, and what they wish they’d known before starting. Our networking guide will show you how to run these conversations effectively.
Tailor Your Resume
Highlight any financial services experience — banking internships, insurance company work, fintech, or even academic projects involving financial institution analysis. Use our IB resume template to make sure you’re presenting your experience in the format that IB recruiters expect.
Prepare Your Story Around Financial Services
Why FIG specifically? Your answer needs to go beyond “I like finance.” Connect it to a genuine experience or intellectual interest — a course in banking regulation, experience at a financial services firm, fascination with the role banks play in the economy, or the complexity of insurance balance sheets. Authenticity matters.
To see the kinds of offers our students have landed and the programs we offer, visit our placement track record and testimonials page.
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