I work in credit risk at a MM.

Hours - average around 60-65 hours for most of the year with some 75-85 hour weeks when there are a lot of deals going on, along with some 45 hour weeks in the 1Q. Comp - incoming anlaysts start at $75K vs. $80K on the coverage side. $5K bump each year. Sign on bonus of $12K and bonuses range from low $20's for a mid bucket 1st year to low $40's for a top bucket 3rd year. Exit Opps - some boutique/mm PE firms, corp. finance for company's you covered, mezz funds, lev fin, etc.

Let me know if you want other specifics

 

Best: financial analysis, modelling, exposure to clients, really learning the ins and outs of companies/industries/financial products/etc and actually feeling like your opinion matters. At my firm, 2nd/3rd year analysts will take on much more responsibilities and be a lead for some smaller/easier clients. Worst: there is some work that is strictly done to please the regulators which can add some more BO-like work to our day-to-day. This is typically only around SNC/Fed exam dates.

Regarding this whole FO/MO/BO debate - I would call it something between FO & MO, or a 1a to coverage. I talk to clients regularly, work on deals, work directly with coverage on a daily basis, but I also do some work that could be considered BO at times, however, this takes up less than 5% of what I do on a day-to-day basis.

I know plenty of people who got rejected by credit, only to receive an offer from coverage. I don't think credit has the prestige factor of coverage, but I'd argue that you'll learn more tangible skills in 2 years of credit than 2 years of coverage.

 

Thanks gatorfinance, that's been helpful.

It seems to me that credit risk is then a good gig... I don't know why but it seemd to me that it was consider a kind of BO role.

Is your job similar to this job description that I've recently applied?


JOB SUMMARY & RESPONSIBILITIES
Credit Risk Management & Advisory (CRMA) is responsible for assessing, monitoring and managing credit risk at the Firm. CRMA, which is staffed globally with offices in New York, London, Hong Kong, Tokyo and other major financial centres, is independent of the Business Units and reports to the Firm’s Chief Risk Officer and Chief Financial Officer. CRMA leverages its extensive expertise in financial, credit and risk analysis to provide astute and objective judgments to the firm and its clients, in either a transactional or advisory capacity.

Since CRMA has been structured to work closely with almost every division of the firm, its professionals gain diverse financial experience and a broad perspective on how the firm functions as a whole. Its unique position keeps CRMA at the forefront of the firm's strategic developments, and the interaction with numerous divisions.

One of the key responsibilities the group is managing credit risk of the firm’s growing exposure to corporates. The department is seeking to recruit a suitable candidate to join the Corporates team as an Analyst based in London.

KEY RESPONSIBILITIES • Assess the credit and financial strength of the firm's corporate borrowers and counterparts by performing fundamental credit analysis using both quantitative and qualitative factors • Make recommendations for setting limits for overall risk appetite • Perform transaction analysis in lending and derivatives, as well as monitor and assess credit exposures • Review and approve loan transactions, determine appetite and regulatory ratings, monitor credit trends in the portfolio, perform distressed analysis and estimate potential impairments • Interact with the Loan origination and Sales & Trading businesses on transactional approvals • Actively participate in credit committees • Report risk information to senior management • Assess the credit rating impact of M&A and capital markets transactions on the firm's corporate clients • Develop and manage relationships with other areas of the firm, including Investment Banking, Sales & Trading, Operations, Collateral Management, Controllers, Treasury, Legal, Compliance, Technology

Basic Qualifications • Degree in Economics / Finance / Business related discipline • Strong interest and familiarity with corporate finance, financial markets and economic developments • Prior experience within Credit Risk, assessing credit worthiness, and providing risk assessment would be preferred • Understanding of credit analysis and transaction approval for corporates beneficial • Strong analytical and quantitative skills • Strong written and verbal communication skills • Ability to work under pressure and to meet deadlines • Ability to work flexibly as part of multiple teams and autonomously • Ability to juggle changing priorities and a varied workload


One of the reasons I was expecting both comp and hours to be lower is because the role is within the "Finance" division, so it's an internal dept, not FO at all.

How difficult did you find it to break in? Skills that are a must to have? Thanks a lot!

Cheers mate

 
Best Response

Asking how hard to break in is too broad a question as it varies on the bank, group, and plethora of other factors. That being said, don't think it's going to be easy because it's not an FO role. At the very least you're going to need to be familiar with a typical framework to assess credit quality, understand interest rates and the financial sector, and mostly important, understand the Credit perspective of things: downside protection.

In my opinion, I think credit risk is something that really doesn't get enough attention on this forum or even in the industry. Credit risk is an interesting field and largely important nowadays due to the high regulatory scruntiny in the post-recession setting. sure it definitely falls behind traditional FO roles in some aspects but also surpasses them in others. At the end of the day, instead of focusing on whether it's BO, maybe focus on what actually matters: the work itself and how well it suits your interests, because the work is quite different from IBD and other FO gigs, not necessarily harder or easier. It should all be a matter of preference.

Also side Story, since the topic of BO roles is brought up, there is actually no official MO roles; there's really only FO and BO. I don't know when the term "MO" was first coined but I've met plenty of people who don't acknowledge it, and consider all MO roles to be BO. That being said, since MO is still widely accepted today as almost a household term in the industry, it seems to show that the line between BO and FO isn't always so clearly defined. Heck after lurking through this forum, I don't think even FO is clearly defined; revenue-generating or client-facing? Those two aren't always the same.

 

great post +1..

'would you know if it is possible to break into credit risk laterally at the associate level (post-MBA) without having actual work experience in the area? Obviously, networking is going to be key here. What types of things (hard skills; be as specific as possible) would you look for someone in the above situation looking to join your team? In other words, what "tests" must this guy pass during networking to get you to put his/her resume in your HR's hands?

Thanks.

 

I interned in GS MRMA and I did constantly interact with the CRMA people and let me tell you that they are nowhere close to IBD. Perhaps in some banks Credit Risk sits within IBD but I assure you at GS it is not. I know that they started at the same base as us: 80k, not sure about bonus though.

 

Yeah I met and hung out with most of the CRMA summer analysts because we all fall under the same division: Finance. Honestly there were a lot of them from non-target schools but some of them from Ivies. It's really a mixed bag. GS really considers all applications. I even met some guy from Princeton interning in operations. Not everyone wants to do IBD... this is NYC

 

For what I know about CRMA: You really need to find out if you're a portfolio reviewer, or researcher. Research is really BO type work- essentially GIR for counterparties. No deals, no client interaction, etc. Reviewers work on deals, constantly talk with Sec Div, IBD, clients, and set IMR and approve trades. They do most of the 'real' credit work. PR's are mostly in NYC or London, with the Fund/Hedge Funds/Private Equity analysts being located in Salt Lake City.

And I'm pretty sure there is no MRMA presence in NYC.

Source: friends in CRMA

 

Chill junior. No need to get offended. And I believe you interned in Irving, if I remember you correctly.

40 hrs per week is way too low. I know guys working 80+. Bonuses are also pretty high for PR's, some teams make at least 20k as a minimum. It just depends on which teams you're staffed on. Credit is a great 'stable' job. The name alone brings exit opps. Additionally, you interact with clients, which according to this shitty forum makes that FO. Are there better gigs? Maybe, but not if you want to make good money and still have a life. (Side note, friends in CRMA NYC are working IBD hours without IBD pay- keep that in mind).

Be very careful which teams you end up on in SLC, with Hedge funds/ private equity being the only team there composed of PR's.

 

I think you're at least a little inaccurate there. I have friends who have worked in both NY and SLC credit, and here's what I learned from them:

From what I gathered, those who work in SLC credit (The researcher roles) DO interact with clients (but mostly for due diligence) and with Sec Div; my friend who worked there told me he did, and he wasn't on a hedge funds team either. He did also say the research role is much like GIR in the sense that there's lot of analysis and reading and writing, while gaining in-depth industry experience. Plus I wouldn't call it a BO-type job if you compared it to GIR.

The NY people, and I guess London too, are the ones who set how much credit exposure is recommended to a counterparty. But depending on the team, they may share responsibilities with the SLC office. I can't speak for how closely anyone in credit risk interacts with IBD. But overall, I believe the NY do interact more with IBD, Sec Div, and other divisions in the firm.

But in the end, it still depends on what team you're placed on and other factors. Overall, I'd say it's a job well worth at least looking into. And for what it's worth: I knew few others who got IBD offers at other banks but rejected by credit risk at GS.

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