What is the difference between investment banking and commercial/ retail banking?

by Girl Banker
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This could easily be asked as an interview question. To help you understand investment banking, it’s best to differentiate it from the type of banking that you have experience with: commercial or retail banking – the banks that you see on the street.

The bank where you maintain your current (UK), checking (USA) or savings account is a commercial or retail bank. Some investment banks have a commercial banking unit, others do not. 

Excerpt from: To Become an Investment banker by Heather Katsonga-Woodward

Example 
A Loan Structuring team in an investment bank can give a company advice on how to structure a loan; however, even if the investment bank has a commercial banking unit, it does not necessarily follow that they will provide that loan.

When the loan is fully structured (i.e. the most achievable terms are determined) the borrowing company can show it to a variety of banks and select the bank that commits to the best terms. This may not be the structuring bank. The structuring bank gets a fee for their advice and the loan provider receives whatever fees they are due for actually providing the loan.

Of course, the lending arm of the structuring bank is likely to provide the best lending terms in many cases as they can account for the fees received by their structuring team. That is, a bank providing several products to a client can afford to charge a little less for each product than would be the case if they were selling just one. ​

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