Corporate banking vs Management Consulting
Lately I've been thinking a lot about alternatives to the IB > PE career path that have a better WLB while still having good earning potential. 60-65 hour weeks with occasional 70+ are okay but consistent 75+ hours a week with the potential of 100 hours is hell. Doesn't get much better in PE.
This made me start to consider Consulting, even tier 2, or ECM/DCM over M&A/Coverage. But some capital markets groups still work a shit ton and I don't know if I would enjoy the travelling in Consulting.
And then Corporate Banking popped into my head. People already discuss as it one of the best careers but I never really considered it until now. It actually sounds very similar to Consulting in terms of comp and hours right out of undergrad. I think I prefer it because of the lack of travel. However, I couldn't really find much info about career progression or what the comp and hours look like above the associate level in CB which makes it harder to compare and see the difference 5 or 10 years down the line. So I thought I'd ask all of you for this info and your thoughts on this.
Which is the better long term career for someone who wants to make cash moneys while still having a somewhat decent life, Corporate banking or Management Consulting?
With the assumption that you're a fairly competent individual, what does the progression of the comp and hours look like at each stage and in which career is it faster/easier to move up?
Corporate banking for the long term
Insurance Companies have large investment groups, primarily credit and real estate. Also direct lending is a solid path with similar hours to the ones you described.
Corporate banking for sure. Reasonable amount of travel, but great wlb/ comp combination
Do you think you could provide the typical salary progression until the VP level?
Have a look here. Also interested if someone has more insights.
Corporate banking is awesome in the right group but there is a ton of variation across the street/even within banks. I personally enjoy what I do, the work is interesting, the pay is great (this will only be true if you're in IBD) and we usually are done by 8-9pm. There are definitely pros and cons though. I think its really important to be in a CB group with high deal flow and the capability to consistently lead syndications. Deals move pretty fast (at least compared to M&A) and you can get a ton of experience executing credit transactions. Maybe sounds dumb but I like how as an analyst I'm often responsible for coordinating all the lawyers drawing up credit agreements and I get to be a part of the negotiation process-- obviously not making decisions but ferrying changes around and discussing the implications with counsel can be pretty interesting and you start to really understand the game by seeing how CAs are created. Another high point is when your bank is leading the syndicate/JLA and you have some more responsibilities coordinating with other banks, and in general even if you are just participating in a deal you will spend a lot of time talking to people who work at other firms, which keeps things interesting and makes the job feel a little more "front office" as an analyst. I think both of these aspects give really valuable exposure. However, the credit analysis side of the job isn't very deep (typically corporate banking = IG only with rare exceptions, most HY goes to LevFin) and you will have to make these super long credit memos that are mostly qualitative stuff, or plugging financials into pre-built grading models. You might do a little modeling for a borrower without operating history or a sub-IG rating, but its not that intense. Because of this I don't feel like you build a ton of transferable skills, just general bond/credit market and industry knowledge. We'll see about exits, to be honest a lot of people do leave to do M&A but I have also seen some buyside/corporate stuff.
Agreed that variation across the street is huge. With some CB groups being closer to IB and others to Commercial Banking. Would be great to get a compiled list of CB group experience per bank.
Personally not interested in CB but WSO needs a CB forum
Couldn't agree more on your last point, so I stole your idea and made a post-- would be a great addition to the site and I think the interest is there.
How is Corp Banking better than DCM when CB actually does analysis on the companies, FS analysis whereas DCM ppl just market comps and do pitchbooks?
I don't understand the phrasing of your question.
Oh so question wasn't directed at you OP actually. Did some surfing in the forum and saw the post Kirosene directed and saw ECM/DCM to be better than CB.
Agree with some of the comments above CB is a solid and stable career path option. The pay varies significantly from bank to bank so I would recommend stick to BB banks (as base pay tend to be the same as IB at a few of these) or big 4 lenders in your country that cover the top corporates.
Being a corporate banker, I have seen juniors exit into (Debt funds, private credit and Corp Dev) whereas seniors exit to F500/FTSE250 clients is fairly common (MD to head of treasury or CFO). Working hours are generally 50-60 hour range with a rare of 65/70+ week. Rough estimate of salary scale for mid to senior level (from my circle of friends in tier 1 cities at major banks). The more senior you get the more pay is directly linked to the revenue you bring in.
VP: base $140k to $180k (plus bonus 30% to 80%)
Director: base $150k to 250k (plus bonus 40% to 100%)
MD: base $200k to $300k (plus bonus 50% to 150%)
Pretty solid pay. What about at the analyst and associate base at your bank?
I saw a post on another thread where someone said the base for first and second years had been bumped up to 110k and 125k respectively. I'm not sure how accurate that is.
Agree except on comp-- at any serious IB corporate bank an associate is already starting at 175k base, idek what my VP makes but probably base is around 250...and bonus can definitely be multiples of base for the best MDs
CB starting to sound more and more appealing. Could you give me some insight into the lifestyle of your VP and MDs?
Comp you're listing is low for any corp banker in the US if inside the IB umbrella
Associates bases are $140k plus now with bonuses at or above 50%
VP Bases are anywhere from $175k to $225k (some at $250k) and 50%-100% bonuses
No director is making only a $150k base in a CB inside an IB umbrella.
Figures you are quoting are true for US BBs.
However, large European banks (Barclays/HSBC/BNP) tend to have a lower base salary. In London Directors/RM base salary at £120k is common (Average TC inc. bonus is likely to be £200k+ atleast).
Agree with the post except comp progression. Think the bottom range of the sensitivities are a bit light, most MDs prob clear $500k easy.
Please note the salary estimates are based on 2020/21 figures and do not account for recent bumps. Secondly, I am based in London, UK and did a quick USD fx conversion for the above.
I am aware salaries tend to be slightly higher in NYC.
I just got an offer for Corporate Banking at a large balance sheet bank.
An1 - 85k, 10k sign on, circa 20k year end bonus
An2, 95k, same bonus
Aso - 105k - 180k, not sure about bonus
VP - 200 to 250 all in
MD - 500K on the very low end to 1m average comp and maxes out at 2m, you likely will never make over 10m in a year.
Source: my internship + i know a lot of people at my bank through personal relationships
Prior to covid my MD travelled a lot but he said you could ask for non client facing roles albeit for lower comp so its up to you.
My hours were the worst as an intern and never had to stay past 8pm. Only did so a few times so clean up a few things, absolutely positively zero weekend work and my bank for some reason did not do anything on fridays, its like an unofficial 4 day work week.
I heard that when we were working on an m&a deal hours went up to banking levels but only for like a week or two during the whole year and i can live with that
Which city?
This is NYC
If its not due today why not just punt to Monday? This ethos freed me up to see Jackass Forever today for a matinee price (***** btw)
hey man can you DM me I cant DM you
Sure what do you want
Just to add another datapoint. My VP1 comp was $175K base and $125K bonus. Not at a BB and I don’t work more than 50 hrs a week.
In all honesty, i think corporate banking > investment banking. VP1s in IB might make 350k - 400k total comp but they do so for literally double the hours after years of double the sacrifice.
Does not make sense to me thats why i went this route despite going to H/Y/P, plus "prestige" is dead, an investment banker at FT Partners, Raymond James or Nomura is as competent as any BB banker and I hate to say this but girls don't even know the difference between BBs and Boutiques and sure as hell M&A vs Corporate Banking especially because our work overlaps. Pretending otherwise is just hanging on to a relic of yesteryear.
IB VPs make more than $350. $300-350 for associate 1. VPs can make between $450-700 and this year even more.
im in IB and i wanna leave to CB so badly. I generally like work and transactions im doing but hours and intensity has just been too much especially over the past year, dont see myself in IB long term (at least at my current bank)
for those that went IB to CB, how did you answer the "Why CB" question and how much technicals do u need to know specific to CB and credit - very very little experience here personally, almost all my exposure has been to m&a
alternatively have been thinking of looking around for roles in corp dev, quite interested in the m&a transactions itself
The answer to the “why CB” is generally just honesty around why you’re moving. Work life balance is a fine answer
Technicals you’ll be fine, you have every skill necessary. Just understand that cash flow to service debt is most important; secondary concerns are collateral coverage or other ways to repay debt.
The "Why __" questions are so annoying. What do interviewers even gain from asking questions like that?
So you won’t just jump
Like the others have said, you will generally be fine on technicals given your IB experience. I'm bored so here are a few CB specific things that you could brush up on:
- Credit analysis: What are the qualitative/quantitative factors that you should use to evaluate the creditworthiness of a borrower? Things like their overall level of debt (leverage ratios), their cash flow generation (debt service ratios), management, macro trends, etc. I'm sure you can find some free guides/articles online that will give you more than enough knowledge on this.
- Some familiarity with what the lending process looks like. For example, understanding what a vanilla cap structure might look like, the fact that corporate banks deal in syndicates, which types of debt are held on the bank's balance sheet vs sold to the market, the documents negotiated by banks that govern the lending (with things like covenants).
Overall I wouldn't worry much about technicals. CB has a good deal of ex IB people and they immediately recognize that someone coming from IB can learn this stuff on the job quickly. In my experience, people coming out of IB were usually bumped to the top of the list by CB hiring managers.
A lot of discussion about Corporate Banking, so thought I'd add in my two cents on Management Consulting (MBB, EYP/Strat&/etc. at the Big4). As a disclaimer, this is just from my experience/information from colleagues and my office location is in Manhattan. Aka this may not be accurate through the lens of other cities, sub-product lines under the Management Consulting umbrella, etc.
Roles & YOE
- Level 1; Business Analyst / Associate Consultant: 0-1 YOE (out of college)
- Level 2; Associate / Consultant: 2+ YOE (post-graduate school or direct promotes)
- Level 3; Engagement Manager / Project Leader / Director / Manager / VP: 3-7 YOE after grad school
- Level 4; Associate Partner / Principal / Senior Director / Senior Manager / Senior VP: 2-4 YOE after Level 3
- Level 5: Partner / non-equity Partner aka MD: YOE fluctuates here as some folks stay in Level 4 for 3-4 years some 7+ years before making the case
- Level 6: Senior Partner (typically reserved for equity Partners only. Rare to see a non-equity Partner in these roles): At least 4 YOE after Level 5. No exact mechanics and a very small population of folks at this level
WLB
- Level 1 - 3; Typically: 60-70hrs a week. Live case / transaction: 80+hrs. Difficulty of work: low to medium/high
- Level 4; Typically: 50-60hrs a week. Live case / transaction: 75+hrs. Difficulty of work: medium
- Level 5-6; Typically: 40-50hrs (though I would note this can really fluctuate depending on the Partner). Live case / transaction: too big of a range. Can sometimes be 0 if they have a good team or just don't care after the sale or 80+hrs if they are very 'hands on' (this time commitment is rare)
Starting Salary / Bonus (Approximations. May vary)
- Level 1; ~$80-100k / ~15% of base salary
- Level 2; ~$130-160 / ~20%
- Level 3; ~$150-180 / ~30%
- Level 4; ~$250-350 / ~40-50%
- Level 5-6; Completely different pay structure and bonuses. Can vary widely across product lines. I've seen Level 4s in marquee products make more than 1st-2nd year Partners in non-core products. But typically this starts to trend into 7 figure land but HIGHLY dependent on the business you generate.
Hope that helps.
This a great post, really helpful. Thanks a lot.
I worked in IB first before switching to CB and I’ll just say working less hours (20-30) really does add up. I saw my Associates and VP’s make tons of money but noticed most of them were not going on vacations, not spending much time with their families and that just wasn’t the life I wanted to live.
Make no mistake, IB gives you the best exit options, but for me CB was the best balance of comp to WLB. I know plenty of young VP’s in CB that all earn over $300K a year and have time to go on vacations, spend time with friends and families and generally just enjoy their lives.
Yes, you will earn more in IB. But if $300K+ at 28-30 years old is “bad” to you then CB is not for you. It’s personally enough for me to live a very comfortable life, and when I hit Director level in a couple of years it will definitely be enough. The best part is that I don’t feel burnt out anymore like I did when I worked in IB. It’s a lifestyle gig.
I think a lot of us have become desensitized to the insane comp of IB with even analysts making stupid amounts these days. Corporate banking comp is great.
Could you give me a rough estimate of how long each promotion takes from Analyst to VP?
At what stage did you switch over to CB? Is it possible if I start as an MBA IB associate then switch over to CB after say 2 years?
Couple questions for you (or anyone else with experience in CB):
I don't have direct experience but I have seen corporate banking postings for San Francisco and Houston (LCOL). In Houston Citi's IB practice is solid and I imagine that translates to the corporate bank, but you have to like oil and gas.
I kinda had to check my emails a lot during my internship but my office had an unspoken rule of no emails on Friday + the weekend. But Monday to Thursday I felt like i was on call 24/7 even though i was rarely sent emails past 9pm
Don't sweat it off, both are garbage industries.
Lmao ud be fun to work with - give me an internship at ur firm will u?
Can anyone comment on work life balance if the corporate bank is within the investment bank. I saw a post elsewhere where someone said Bank of America corporate banking was "investment banking lite" i.e., putting in 70 hours per week on average, for those in the know, any truth to that? What can be said about JPM and Citi?
Also anyone know anything about Truist? The money goes further in Atlanta and I read they pay well. Is it a potentially good long term option? Or is the type of work you do there significantly worse compared to the BBs for it to not be worth it?
Can confirm JPM CB is ~70 hour weeks (can ramp up to 80+ during busy times) with weekend work 3/4 weeks. Not a true lifestyle gig.
Any groups within jpm ccbsi/cb that are more relaxed? I’d this mostly for diversified groups/global?
Can confirm same at Citi in top CB group. Analyst and associates easily average ~60 hr weeks. During certain times of the year/deals you're on, easily can push ~80.
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