Wholesale Lending vs Credit for Grad Rotation
I have a return offer from a BB to do a 3-part corp banking rotational program, where I can pick one of my rotations. They split credit and wholesale lending as separate teams, and I'm confused as to which one is the "right" one for me to build experience in. Credit seems to do credit analysis/risk while lending seems more focused on syndication, negotiation on RCFs, and generally interacting with prospective clients.
This split seems a little unusual, and I'm wondering which of these will be the more transferable experience to continue a career in the credit world. What would you pick?
Unusual as ‘lending’ often extends to sector/product teams beyond just syndication (e.g sector coverage, levfin), with ‘credit’ referring to teams within the risk department.
Difficult to comment based on the info shared, but happy to help if you have some more specific info - either within the thread or over PM (started my career in corporate banking too).
Thanks for the reply, I'll try to add more detail here in case anyone find this useful in the future. I updated the title as I recalled that the lending desk was formally called wholesale lending. If I recall correctly this team is primarily concerned with RCFs, term loans, and can get involved in syndicated loans too. They do look at the financial statements to assess potential clients but only more of a smell test before passing it off to credit, who get deep into the financials to assess risk. I was told credit is essentially a risk team. Thats the extent of my understanding if that clarifies anything. What I'm looking to get out of it is skills that are maximally transferable within the credit world and an entry on my CV that builds credibility.
I appreciate you taking the time to help with this!
As an aside, is there any point in a cash management/payment solutions rotation or should I avoid? Worried that this is a too niche of a thing to work in/learn about.
Completely down to your goals of course, but of the two, lending seems to be the better option. You’re still going to look at the credit, even if from a slightly different angle (ie is this deal worth spending our time on).
Would highly recommend picking up Michael Gatto’s book on credit analysis.
Edit: Suggest steering away from the payment solutions rotation too unless you have a particular interest. It’s more of a monotonous middle/back office role, albeit no doubt the least hours/pressure.
Hope this helps.
US BB? I would pick Lending because I find it more interesting - but that’s just a personal preference.
Would describe as an international BB, this job is in EU. Leaning towards lending myself as I worry the credit role would be rather monotonous. Then again, it's only an 8-month rotation so if credit would build better credibility for future roles I'd more likely do that.
Thanks for your input!
Gotcha. Best of luck!
Based on the most helpful WSO content, here's what you need to know:
Wholesale Credit: - Function: Underwriting loans (typically credit facilities) to companies or HNW individuals. - Focus: Credit analysis and risk assessment. - Pros: - Great work-life balance. - Decent pay considering true hours worked. - Understanding and supportive colleagues. - Potential for internal transfers within the bank. - Cons: - Repetitive nature of work (analyze financials, complete risk rating scorecard, write up CAM, repeat). - Operationally intensive, requiring regular monitoring of portfolios.
Credit Risk: - Function: Similar to wholesale credit but with a broader focus on risk management. - Pros: - Exposure to various financial statements and red flags. - Potential to lateral into IB from the same credit coverage group (e.g., Energy Credit to Energy IB or LevFin Credit to LevFin IB) with extensive study and networking. - Cons: - Limited exit opportunities to Private Credit or other credit-related buy-side opportunities.
Considerations for Transferable Experience: - Wholesale Credit: Offers a solid foundation in credit analysis and risk, which is essential for a career in the credit world. - Credit Risk: Provides a broader understanding of risk management, which can be valuable for various roles within finance.
Recommendation: - If you prioritize work-life balance and want a role with supportive colleagues and decent pay, Wholesale Credit might be the better choice. - If you aim for a broader understanding of risk management and potential lateral moves within the bank, Credit Risk could be more beneficial.
Ultimately, both options provide valuable experience, but Wholesale Credit might offer a more direct path to building a career in the credit world.
Sources: BofA Wholsale Credit vs Credit Risk, Credit Analyst Q&A, Q&A - Commercial Banking Credit Risk SVP in Southeast USA, Career Path Starting as Credit Analyst, Golub Capital type direct lending fund
Each bank(or organisation) is different. I know in some banks relationship managers are doing lending and conducting credit analysis themselves while in other banks RMs do not. Instead there is some sort of credit analysis team sitting between RM and Risk. This team will work on the credit memo and assessment when RM brings in the deal. Credit Risk is more backend than the two mentioned above. Depending on the role itself and the bank, as well as the dynamic among these three functions, your day to day and work will vary.
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