Introducing Our FIG Guide for Investment Banking

The Financial Institutions Group is unlike any other coverage group in investment banking. While healthcare bankers can still rely on standard DCF and EV/EBITDA valuation, and TMT bankers apply familiar enterprise value frameworks to software companies, FIG bankers work in a world where most of the standard toolkit breaks down entirely. You cannot calculate enterprise value for a bank. EBITDA is meaningless for an insurer. Unlevered free cash flow does not apply to a financial institution where debt is the core input to the business, not a financing decision.

This fundamental difference makes FIG one of the most intellectually demanding coverage groups and one of the hardest to prepare for. Interviewers don't just expect you to know how to walk through a DCF or build a merger model. They expect you to explain why those frameworks fail for financials, and then articulate the alternative approaches that replace them.

We built the FIG Investment Banking Guide to close this preparation gap. With 152 articles organized across 13 sections, it covers everything from basic bank accounting to advanced regulatory capital analysis, from insurance underwriting cycles to fintech valuation frameworks, from deal structuring mechanics to dedicated interview preparation. Here is what the guide covers and why each section matters.

Before diving into the guide's structure, it's worth understanding just how significant FIG is within investment banking. FIG is the single largest fee-generating coverage group globally, accounting for roughly 35% of the worldwide IB fee pool. Financial services M&A reached $418.9 billion in disclosed deal value in 2025, a 49% increase year-over-year, with 93 megadeals above $1 billion.

The deal pipeline for 2026 remains robust. U.S. banking M&A capped off a historic 2025, with landmark deals including Fifth Third's acquisition of Comerica for $10.9 billion, Pinnacle Financial's merger with Synovus for $8.6 billion, and Huntington Bancshares' acquisition of Cadence Bank for $7.4 billion. In payments, Global Payments acquired Worldpay for $24.25 billion. The fintech IPO window also reopened with Klarna (valued at $15 billion), Chime ($18.4 billion), and Circle ($6 billion). All of this activity creates sustained demand for FIG bankers who understand how to value, structure, and execute deals involving financial institutions.

The guide opens with 10 articles that orient you within the FIG ecosystem. The section opener, What FIG Investment Bankers Do, explains why FIG exists as a separate group and what makes the work fundamentally different from other coverage areas.

The most important conceptual article in the entire guide is Why Debt Is Raw Material, Not Financing. This single idea unlocks everything else in FIG. A bank takes in deposits at 2% and lends them out at 6%, earning the net interest margin. Debt isn't on the balance sheet as a financing choice; it's the inventory that generates revenue. Once this clicks, you understand why enterprise value doesn't work, why EBITDA is meaningless, and why FIG has developed its own valuation toolkit.

The section also covers how FIG teams are organized (by sub-sector, with banking and insurance typically separated from fintech and payments), FIG at bulge brackets versus boutiques versus specialists, and career paths from FIG into insurance PE, bank-focused hedge funds, and financial regulators.

With 15 articles, this is the guide's most technically dense section and arguably the most important for interview preparation. It covers the accounting and metrics unique to financial institutions, starting with detailed walkthroughs of bank income statements and bank balance sheets.

Key articles include:

Return on Tangible Common Equity (ROTCE)

Net income available to common shareholders divided by average tangible common equity. ROTCE strips out goodwill and intangible assets (which inflate book value after acquisitions) to measure how efficiently a bank generates profits from its "real" equity capital. A bank trading at 2x tangible book value with 18% ROTCE is typically a strong performer; a bank at 0.8x TBV with 6% ROTCE signals the market expects continued underperformance.

Three sections cover the major financial institution sub-sectors that generate the bulk of FIG deal flow.

Commercial Banking and Depositories (14 Articles)

This section covers the full spectrum of depository institutions, from universal banks like JPMorgan to community banks with a single branch. Key articles explain how commercial banks make money (the core "borrow short, lend long" model), deposit franchise valuation (why low-cost deposits are the most valuable asset a bank owns), and bank consolidation dynamics that are driving the current wave of regional bank M&A.

The section also addresses commercial real estate lending (a major risk focus since 2023), interest rate risk management (which became front-page news during the SVB collapse), and the thrift model and mutual-to-stock conversions.

Insurance (14 Articles)

Insurance is often the most unfamiliar sub-sector for candidates coming from standard IB prep. This section starts with a comprehensive industry overview and then deep-dives into life insurance (long-duration liabilities, embedded value), property and casualty (underwriting cycles, combined ratios), reinsurance, and Buffett's favorite concept: insurance float.

The section also covers high-deal-activity sub-segments like insurance brokers and MGAs (managing general agents), both of which have been PE favorites for roll-up strategies.

Asset and Wealth Management (12 Articles)

Covering asset management business models, traditional vs. alternative asset managers, fee compression, private credit (the fastest-growing asset class), and the great RIA consolidation driven by PE roll-ups. This section is particularly relevant given the wave of asset manager M&A and the public listings of alternative managers like Apollo, KKR, and Ares.

These sections cover the broader FIG universe beyond traditional banking and insurance.

Specialty Finance (10 articles) covers BDCs, consumer finance, mortgage finance and securitization, equipment leasing, and auto finance. These niche segments generate significant deal flow, particularly in PE-backed platforms.

FinTech and Payments (12 articles) covers the fintech landscape, payments processing (one of the largest revenue pools in all of financial services), card networks vs. processors vs. facilitators, neobanks, BNPL, embedded finance, and fintech valuation. This section bridges the gap between traditional FIG coverage and the tech-adjacent companies that increasingly fall within FIG's mandate.

Exchanges and Market Infrastructure (8 articles) covers stock exchanges and trading venues, derivatives exchanges, rating agencies, clearing and settlement, and exchange M&A. These are high-margin, oligopolistic businesses that trade at premium multiples (15-25x EBITDA) and generate consistent deal activity.

This is where the guide delivers its most differentiated content. With 14 articles, the valuation section covers every methodology FIG bankers use to value financial institutions:

Dividend Discount Model (DDM)

A valuation methodology that estimates the intrinsic value of a financial institution's equity by discounting projected future dividends and share buybacks to present value using the cost of equity. DDM is the FIG equivalent of a DCF analysis, applied at the equity level rather than the enterprise level because debt cannot be separated from the business for financial institutions. A three-stage DDM typically models explicit dividends for 5-10 years, a transition period, and a terminal value based on a sustainable payout ratio and growth rate.

The section also covers ROE/P-TBV regression analysis (a technique for identifying mispriced banks relative to their profitability), credit quality adjustments, and fintech vs. traditional FIG valuation.

Master interview fundamentals: Practice 1,000+ technical and behavioral questions covering FIG-specific valuation and accounting concepts, download our iOS app for comprehensive interview prep.

12 articles covering the regulatory environment that shapes every FIG transaction. Understanding why regulation drives everything in FIG is non-negotiable for interviews. Key articles include:

12 articles covering how FIG deals are actually structured, priced, and approved. Starting with how bank M&A deals work, the section covers:

The final two sections tie everything together with current market context and actionable interview preparation.

Market Intelligence (10 articles) covers the deals and trends you should know for interviews, including the Capital One-Discover landmark deal, the regional bank consolidation wave, insurance brokerage mega-deals, European banking consolidation, PE in financial services, and the 2023 banking crisis lessons from SVB.

Interviewing for FIG IB (8 articles) provides dedicated preparation for FIG group interviews, including how to answer "Why FIG?", how to discuss a FIG deal in the news, FIG modeling tests, how to pitch a financial institution stock, and how to network into FIG.

The FIG guide is built for anyone preparing for FIG interviews or looking to deepen their understanding of financial institution analysis:

The guide is structured as both a course you can read from start to finish (each section builds on earlier ones) and a reference you can jump into at any point to review specific topics.

Get the complete guide: Download our comprehensive 160-page PDF covering all technical questions and frameworks, access the IB Interview Guide for structured interview preparation.

FIG represents the intersection of finance, regulation, and technology. It's a coverage area where the deals are massive, the analysis is uniquely challenging, and the career opportunities span everything from bank-focused PE to financial regulation to insurance investing. Whether you're preparing for your first FIG interview or building deeper expertise within the group, the FIG Investment Banking Guide gives you the depth and breadth to stand out.

Explore the guide sections that match your preparation priorities, starting with the landscape overview and accounting fundamentals if you're building from scratch, or jumping directly into valuation and deal structures if you already have the foundation. If you're also interested in other coverage areas, check out our guides on TMT investment banking, healthcare investment banking, and energy investment banking.