Commercial Banking or Corporate Banking?
Assume you don't want to be an investment banking hardo working 110 hours per week EVER.
If you had to choose between a career in commercial banking or a career in corporate banking, which would you choose and why?
Commercial Banking:
- Pay starts at 80K All-In out of Undergrad
- Pay hits ceiling around 150K All-In as a Team/District Manager/AVP by Year 8
- Work-Life Balance means you have time for relationships, startup, 4 weeks paid vacation, benefits you can actually use.
- No compliance monitoring for trading/investing
- Immediate and frequent client interaction, leading the dialogue with CEOs/CFOs of MM companies.
- Can always move into corporate banking after like 6-8 years in commercial
Corporate Banking:
- Pay starts at 100K All-In out of Undergrad
- Pay hits ceiling around $250K All-In as a VP by Year 7 (Who knows how long it takes to make MD and what the pay is like?)
- Work-Life Balance is less than commercial banking.. but you're out by 7-8 pm most days and rarely ever work full weekend days.
- Can only trade/invest in mutual funds and real estate.
- No client interaction aside from listening to dial-in pitches until VP+ in Year 7.
- More interesting work and financial analysis (arguably) because of larger companies
- Better Exit Opps? (Maybe?)
Overall I’m pretty happy with the jump to IB. If you’re someone that really values work life balance though I wouldn’t do it. Big difference between getting off at 7/8pm compared to 12-2am on average. I enjoy the work much more and find it much more engaging and interesting. Churning out bond and credit facility refis can get pretty mundane after awhile (at least for me). Also I think gives me more optionality in terms of exits if or when I leave banking. The ramping up / learning curve was not bad for me. Most of the work is very similar. Financial analysis and formatting PowerPoints after you’ve been doing it for awhile is all the same (I had a little over 2 years in CB when I made the jump). In terms of interviews, you do have to fight against the stereotype / notion that a lot of investment bankers have that in CB you’re not doing much financial analysis or similar things to IB. I was always surprised actually with how many bankers really don’t know what corporate bankers did. So be prepared to answer what you’re doing day to day, your modeling / financial analysis experience, etc. You’ll also be questioned about whether you’re ready for the hours (obviously just answer saying you know what you’re getting into and it’s what you really want to do and the deal experience you want to get blah blah blah). The biggest thing that hold me back from getting offers on super days was just the fact I hadn’t worked on any sellside deals which there’s not really anything you can do about lol. I was over 2 years of experience in CB so was at a bit of tweener stage where in lots of group eyes I was too experienced to come in as an A1 and reset so they thought I should recruit for a experienced lateral spot and when I interviewed for lateral spots I was competing against people that could speak to sellside experience so even when I thought I killed the super day if the bank has two equally good candidates and one is already in IB and one is in CB then they’ll just go with the IB candidate so that can make things more difficult. Some groups did recommend I recruit for an A1 spot though and I actually got a BB tech offer to come in as an A1 but turned it down for a MM bank that was letting me come in as an A2 and was in a city I preferred. Every group or even every person within groups will have different opinions on what experience level you should recruit for. My suggestion would to just be flexible and communicate that you really want to make a switch and that if a setback is what happens to your analyst years then that’s fine and that a 1/2 year setback is not important to you especially over a long career and you really are more focused on building a different skill set / deal experience and continue to learn as a junior banker. I would come in with the mindset that you’re most likely going to be spend like 3-4.5 years as analyst with making a switch externally (I knew people that did it internally at my bank and they still always took a 1 year setback in analyst years). Hope that advice helps
Can't speak to Corp Banking but I have basically been in commercial my whole career. One thing I should point out is that there are two main career paths in Commercial - Sales side (RM) and Credit Side (analyst/eventually a PM) - for the RM role, pay can be significant. For the Credit/PM route, you'll probably top out around $150K within 10-15 years of your career(midwest figures) - if you get really high up in Credit, you can probably push closer to ~$200K. For reference, top RMs can pull $300K+.
Here's comp progression for me (Midwest) - most of the other figures in this thread seem to be NYC/other HCOL based but maybe not.
This is all on the Credit side i.e., not the sales side. My job is easy, I never work more than 40 hours a week usually, never any weekend work, and basically I own my schedule as long as the work gets done.
I personally wouldn't take the extra money to work that extra 10-15 hours a week - it doesn't sound like a lot, but that's enough time to get a solid workout in and cook dinner each day and still have that 1-2hours to relax and get 8 hours of sleep. Mind you, my wife also makes decent money (~$60-70K and she's due for a promo), so soon we'll be sitting together at ~$175K all in, which where we live for our age is a lotttttt of money.
I’d start at a corporate bank with a good share of lead mandates early in my career. There, sometimes analysts and associates get to sit in on lenders meetings in person which may or may not happen if you’re a junior at a non-lead bank. Once you get enough experience supporting lead deals say at the sr associate/jr VP level, hop to a non-lead bank. Take phone calls from leads and clients, be friendly, add incremental value by reviewing structures but not having to grind them out with clients. Work 40-50 hrs per week (vs 60-70 hrs at lead banks), and collect decent pay (some discount, but not a huge amount…better on a per hour basis). Then just cruise until your MD retires and take his or her spot. Boom done.