A British term for a bank that specializes not in lending out its own funds, but in providing various financial services such as accepting bills arising out of trade, underwriting new issues, and providing advice on acquisitions, mergers, foreign exchange, portfolio management, etc. Bloomberg Financial Dictionary
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► See Investment Bank.
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merchant bank UK US noun [C]
► BANKING a bank that does business with large companies and governments, providing them with finance and with advice relating especially to shares, bonds, etc. and takeovers (= occasions when one company buys another): »
The company has called in a city merchant bank to advise on its options.
merchant banking noun [U]
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He spent a year in Bombay setting up HSBC's merchant banking division there.
Financial and business terms. 2012.