To all those in Corporate / Commercial Banking / PC / Direct Lending, where does the underwriting function sit in your organization?
At my mega regional bank it is seen as a client-facing front office gig with real time spent with the relationship managers negotiation deal structure and actual client face time. Heard this may be different at other banks (for example, heard JPM keeps commercial banking underwriting as a middle office function)
Curious what everyone has seen regarding UW culture at other places. Also in PC I assume that it is a front office, client facing role isnt it?
Isn't UW by nature always a back-office job? Under is in the name. What does your face time entail? Asking the clients to send along DD materials or working with them to get new deals signed up?
I have sat in UW chair at both corporate (super regional with a capital markets team - not a CIB type shop) and commercial bank.
The answer to your question will depend first on the type of bank and second on the idiosyncrasies of each bank within that segment.
Corporate Bank - things tend to be much more of a soap bubble in this space and underwriting/portfolio management/analyst (all synonymous) are going to converge on more of a mid-office role. This is just due to the way the business is ordered where professionals put together diligence items, RFPs, and bank books. You pretty much take the info they give you and push it through your particular bank's sausage machine and decide how much you want to subscribe to. There might be a few clarifications here and there but rarely will anything that you as an UW produce have any impact on the final shape of the product. Your work is just papering the file to show why the bank chose to participate and at what level.
Commercial Bank - this is going to depend entirely on the culture of the bank, its size, and the bankers you work with.
Can't speak to the PC/DL arrangements.
Thank you so much for providing this info! Just out of sheer curiosity, what does the career pipeline for a regional bank credit analyst look like?
I’m currently a commercial banker at a hyper-regional bank and I am not entirely a fan of the sales-heavy relationship management side of the job. I’d like to move purely into the credit side, and eventually I’d like to move my career either into credit ratings or broader credit research.
Thank you in advance!
Where do the analysts you work with presently sit? They (or their team lead) would be your best resource to get lay of the land inside your current institution.
At Citi they restructured underwriting to sit under LevFin, so they consider it to be front office. The legacy structure was middle office credit risk which they moved away from. Corporate banking handles new originated credits, then UW handles any add on transactions and portfolio management.
Are these groups stratified by industry / coverage? Is there room to become subject matter experts even if you are in underwriting?
I can speak for private credit / direct lending shops - underwriting is part of the investment team and absolutely “front office.” The investment team may be split into originators (generally only at senior level, manage PE relationships and source deals) and the underwriting team (deal teams that actually carry out deal underwriting, diligence & execution and manage the credit post-close), or can be just one investment team where everyone eventually does both (origination work usually comes into play at VP level).
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