Could anyone please assist me and point out the differences in these two sectors of finance. Any explanation on what professions are the outcomes of each and how they differ in regards to lifestyle / competitiveness would be appreciated.
Thank you.
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bump. I'd like to know this as well.
CB is when you work for a finance institution eg a Bank and help corporates raise debt capital. You lend to companies.
CF is when you work for any company in the finance department and manage the companies finances. You decide which investments to make, capital budgeting etc...CF is a broad term. You could also work for an advisory company, eg the Advisory team of a Big 4 Accounting firm and help companies do the same function.
I previously understood that M&A was under CF,
Would it suffice to say that the terms and positions discussed on WSO are mostly under CB?
Commercial Banking: lending money to businesses; checking/savings accounts. Company examples: Fifth Third Bank, US Bank; Some investment banks have CBs: Bank of America, Wells Fargo, JPMorgan, etc.
Corporate Finance: working in the finance department of a company (developing/managing budgets, company financial systems, resource utilization, capital investment projects, some accounting, cost reduction, management reporting, etc.). Company examples: Intel, Microsoft, GE, General Mills, etc.
Corporate Finance Advisory: advise clients (companies) on M&A, recapitalizations, business valuations, and restructuring. Company examples: Morgan Stanley, Goldman Sachs, Lazard; and again, some people in this space have CBs: Citigroup, Bank of America, etc.
It's this last category (CF Advisory) that we discuss most on WSO.
M&A is very much CF. Like I said, when you advise a company about investments/finance decisions ( which is what M&A is ) - that is CF.
What are the earning potentials for both corporate finance and commercial banking? Which one typically leads to better exit opportunities?
Ok guys, these questions could be answered on Wikipedia.
As for salary and exist ops: corp. fin. advisory > corp. fin. and CB.
let me google that for you
Trust me man, I've tried, but there isn't as much info about commercial banking as there is fr investment banking. They might tell you what it's all about, but there is almost no information about the exit opportunities, salaries, etc. That's why I'm asking. I checked vault as well, and, as far as the free version is concerned, there isn't much info there either unless you pay or the premium version or whatever.
I had a commercial banking offer from BoA/WFC/JPM that focused on ~$2Bn+ revenue companies. It was $65k base + $5k signing bonus... end of year bonus was expectedly small (around $5k).
Hours are decent, around 60 hrs but exit ops are quite curtailed. You can mainly move around commercial banking from bank to bank, or get your MBA and move into something else.
If you don't mind me asking, how much salary potential was there if you wanted to move up in the company? I'm not looking at anything out of the ordinary in terms of salary, I'm just hoping to break 6 figures fairly quickly, and get into the higher-end (think 200k or even 150) by the time I'm 40. That's my goal, so can senior credit analysts pull that, especially if one gets an MBA? I'm also thinking of sitting for the CPA, so could that help? How would you compare accounting and commercial banking in terms of which is more respected (for the MBA) and which one has better potential to earn money?
As far as exit ops, you aren't limited to just moving from bank to bank. A case can be made for a cfo/treasury route at a corporation.
What is rarely mentioned is the private equity exists. A number of MM PE's have been started, and are ran by, people from commercial banking backgrounds. You will NOT be a candidate for bigger shops, but the relationships you'll build in your commercial bank's region can set you up for a move to PE. After my IB internship, I spoke to two PE shops, both of which are ran by ex-commercial bankers (they helped found the commercial bank, as well as sell it to a larger competitor).
That being said, I think it will be more difficult in 5-10 years to make this move. It seems to only work for older adults.
is the CFA of any use in commercial banking or corporate finance, or is it limited mainly towards portfolio management/PWM?
I think the CFA is no fail cert, its pretty widely recognized and respected by all finance related professionals.
bump.
I am very interested in commercial banking but I do have corporate finance experience (GE FMP internship).
Which would be a better option to pursue post grad? I go to a target school in Canada but my grades arent the highest (made up for it with experiences but still hurts for capital market recruiting).
In all due honesty I love the private mid market and the opportunity to work with entrepreneurs/SMEs which is why the commercial banking route seems great. But CB doesnt seem to have many exits and seems to be particularly risky for that reason. Is there room to do anything more entrepreneurial after CB like PE/VC as mentioned above? Mind you I mean smaller shop as opposed to a KKR or ONEX.
I dont mind doing an MBA and already plan on doing my CFA.
BB Commercial Banking v. F100 corporate finance? (Originally Posted: 07/13/2014)
Hey everyone,
I saw this thread was posted on here not too long ago but it seemed that the thread/user was spamming and I was curious on what were your thoughts on this. Which role above would give a better holistic finance experience and what are some of the pros/cons of each route?
Also interested.
I would say banking for a better experience. corporate finance gigs at these huge companies are risky, you can very well end up just working 40 hours a week doing very accounting-related tasks. In banking, you'll get transaction experience and gain a more broad set of traditional "finance" skills. My $0.02.
Agree with Texas Tea on this one. I had a similar choice coming out of college. Went the commercial banking route due to actual "finance" experience. The skillset from commercial banking can actually take you a long way.
That is bad advice. Take the F500 gig. It'll take you places or get you into a top B School.
Care to explain?
Interested to hear more opinions too, as I am in a similar situation
I dunno, I'm still a bit waffly on the whole CF thing. I have nearly two years now in a corporate finance gig at a F1000. In some ways it has been great, the skill set I have acquired is very marketable and I have turned down multiple unsolicited jobs/interviews in the last nine months.
On the other hand, I am bored and frankly I think I would be bored doing the director level equivalent of what I am doing. No idea if comm banking would be better or worse. However, I do have a friend doing BB CB and she loves it.
Plus I think mid-career earnings in CB are generally higher, you can't really crack $150k in CF in my industry until Director level. That's typically 15+ years in even for a high performer.
Has your work emphasized more accounting or finance? Or a good balance? Just curious.
To comment some more on commercial banking, the role starts off more analytical and generally moves toward a more relationship/sales aspect. So it can get better/more interesting depending on if that is what you are looking for. As to salary, there are young 30's bankers at my bank that make in the 200k range and this is at a regional.
Commercial Banking FO or Corporate Cash Management MO? (Originally Posted: 02/03/2016)
I have an offer from a Commercial Bank for a front office role. I currently work in the mid-office/product management space for a BB in Corporate Cash management. Goal is to go to B-school or get into corporate banking. What would be better for admissions? the BB mid office or the Commercial Bank front office?
Obviously commercial banking. Why is this even a question? ??
Corporate Banking Credit vs. Commercial Banking Credit (Originally Posted: 02/24/2015)
Have two offers, and not sure the difference totally. Commercial credit at BAML vs. Corporate Credit at TD.. opinions? Thanks!
They're generally the same, just the size of the deals are different. It's basically Corporate Banking vs. Commercial Banking. I believe for JPM Commercial Banking Credit they work with midsize companies from $200M-$2B to give credit. In Corporate Banking they're likely much larger multinational companies.
Corp Banking offers the chance to work on larger deals, but fundamentally the credit analysis isn't that much different. I'd assume the FT comp for Corp Credit at TD would be more than at the role for BAML.
Man, you are right at some extents!
thanks, yes compensation is higher. seems commercial is slightly fewer hours but seems its harder to go from commercial to corporate rather then Visa-versa.
Does TD lead a lot of deals?
No. TD doesn't lead alot.
And it's tough to compare. Different banks group company sizes differently. So commercial at Boa could and most like is, the same size as corporate at Td.
Take the better institution
Corporate/Commercial Banking vs F500 Finance (Originally Posted: 11/08/2010)
Which career is better for the long haul? I've been doing some reflecting, and I've realized that maybe, I'm just not smart enough to get into high finance/consulting and I need to be more realistic. Basically, if I want an upper-middle to lower-upper class lifestyle (toping out at around 200k or so, which is considered to be normal person wealthy), so which is the better career for reaching a high, but solid salary and enough time off to relax/hang out with family? I also want a career with a good amount of modeling/NPV or IRR anaylsis and don't just want to be doing accounting-work (I've heard that corp finance can be a lot of that sometimes), so which would you recommend for someone like me?
in on results brother
im interested as well
Bump
Commercial Banking or Corporate Banking (Originally Posted: 09/21/2010)
Currently working as an analyst in Commercial Banking, making 75k base, should I take opportunity to work in Corporate Banking, for same salary? I want to go to B school eventually also.
Pros about Commercial- less hours, decent pay for being out of school 2 years, solid credit and underwriting skills Cons about Commercial- less exposure to complicated banking products, only exposed to Middle Market Companies
Pros about Corporate: -could negotiate the base salary (although not sure how much more they will give me for being 2nd year analyst), bonuses are better (based on what I've researched and heard), exposure to wider range of products and bigger companies Cons about Corporate- longer hours, potentially same base,
Absolutely take it. Move up the chain. What are you working for if not to succeed and progress? Commercial banking dead ends after a while, move up or move out.
woah 75K base? Where are you working? pm me.
Barnaby, you saying I should stay and just take the easy way out and the money? (bonuses are terrible in Comm Banking by the way if we even get one)
Corporate banking will make you more money in the long run.
That's what we'ER all going for anyway, right?
Sure and I guess and a stronger skill set/ knowledge?
Would Corporate Banking be better for me if I want to get an MBA?
anyone?
yes i think so just based on the fact that you are higher up on the food chain, you would have to illustrate to the bschool how more complicated the transactions were, and how much larger the deal size was compared to your commercial banking role.
Curious how this worked out for you? How did you make the move in corporate banking?
bump
You Told Me About Commercial Banking, Now Tell Me About corporate finance if you can (Originally Posted: 08/27/2009)
Alright, so basically, commercial banking did not fit my needs, so I was wondering if anyone can tell me about corporate finance. Once again, I'm mostly considered about:
-How hard it is to break in as a non-target
-Can you make a good living (to me that's 150k after working for 10+ years)? What is the typical career path?
-What is the typical day like? Is there a good amount of quantitative work involved (I like math/working with numbers, so this is a plus not a minus)?
-Is there a lot of sales involved (I hate sales and suck at it)?
thanks, and sorry for all the threads, but google hasn't been helping me as much for these careers vs investment banking.
With decent networking and a good GPA (3.5+) it shouldn't be too difficult to get an entry level position at a F500 company.
After 10 years, yes you will reasonably make around that. It depends on the company and structure as well. You will never be making it rain like some in other areas of finance but you will be able to sustain a comfortable lifestyle.
No sales really as far as I know. This is just what I have gleaned from reading a bunch.
http://www.wallstreetoasis.com/forum/corporate-finance-corp-dev-corpora…
Corporate/Commercial Banking to Project Finance/Corporate Development? (Originally Posted: 11/16/2010)
Hi,
I was wondering if corporate or commercial banking has any transferrable skills to project financing/corporate development within F500 companies or even general financial management within F500 firms? Do corporate/commercial bankers do any NPV/IRR or other financial modeling in order to underwrite loans or is it just pure soft-skills/ relation management BS? I'm looking at Corp banking as a backup to I-banking if I don't get in right away, but my end goal is financial management/Corp dev so I corporate banking still relevant to those areas. Please don't talk about how I won't get into PE from corporate banking because I'm not interested in that
Bump
Corporate banking can be a good starting point to get into a Treasury position at a Fortune 500 company if thats your goal. Depending on the bank, corporate bankers can help or get involved in M&A related deals involved in their coverage or some firms use them for purely credit facilites and relationship related projects. The exposure to the client is probably much better abiet less C-exec and more treasury managers, etc.
Hmm I'm more interested in corporate development/strategy roles. Is there anything transferrable in corporate banking to those areas? I'd imagine bankers have to do some modeling/NPV analysis to see if the firm can pay back the loans, I may be wrong though.
bump...
bump
which is better? Commercial banking analyst in BB vs Finance in BB (Originally Posted: 11/08/2010)
HI guys,
With prospects to go to Bschool after 2 years and then try for IB or PE, which position do you think will provide a better skill set.
Please rank these based on what you know/think. Help greatly appreciated.
132?
1, by far.
1
Thanks
Do the Finance Role-try to get into Treasury or Controllership-I was going to be going into it until I got my ER job. I think you can work 2 become a CFO role in Finance. Much better than the other options!
i'm in 2, and i would definitely say 1
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