Is Corporate Banking that much worse than IB?
About a week ago there was that post about the efficiency of professional careers market, specifically in finance. It touched on corporate banking, but from what I've heard I still think it might be underrated. The base salary is only slightly less than IB and even though the bonus is at worst one fourth the percentage of an IB bonus, the hours might more than make up for it. And it's still a career that offers advancement up to the mid-six figures. What's more, if it's what you get stuck with out of college, you have the opportunity to transition to IB pretty quickly. I read somewhere that further down the line you can use it to get Treasury roles in corporate finance or maybe private banking/PWM.
Maybe it shouldn't be compared to IB and instead to Corporate Finance or consulting. Jumping into corporate finance means slow career progression and low bonuses, but you might be working the 60 hours a week that you'd be working in Corporate Banking. Consulting offers rapid career progression, supposedly, but you will be making less and working more compared to CB until you get higher up or get an exit opp. To me, when you take the Investment Banking comparison out of the picture, Corporate Banking seems like a really good deal.
Am I missing something?
The work can be boring for sure especially at the An/Aso level, but IMO it’s one of the only jobs that you can earn $250K+ in while working 40-50 hrs a week. And it doesn’t take long to move up the ladder. You can make VP in 5-6 yrs and the highest comp will be on the sales/relationship coverage side.
I worked an average of 55-60 hours at the Analyst and Associate level, less than 50 on average at VP level so far. My comp increased significantly from Associate to VP. At Director level I’ll probably be clearing $400K, while still only working less than 50 hrs a week. $400K in my early 30’s might not be IB money but it’s solid income for me.
Every job has tradeoffs. FWIW, at my bank I modeled. Yes, most of the time IB is going to own the model but I raised my hand maybe 1/3rd of the time and I was able to run with the model if I wanted once I gained the trust of my teammates, which doesn’t take long if you’re competent. I left my Analyst/Associate years feeling good about my modeling capabilities but I’d be lying if I said it was really complex stuff.
Relationship coverage. I encourage everyone to try to be on the relationship side vs credit if they’re looking to maximize their income.
Some people can’t handle having sales/revenue goals but it’s honestly not too hard to hit or exceed the revenue goals especially at a BB.
Former CB analyst here that lateraled over to IB at a BB - I'd say that while the lifestyle aspects are definitely true, the learning experience and overall exposure to transactions (at the analyst/early associate level) is really quite poor compared to what you'd get in your typical IB analyst stint.
Other banks might be different, but I'd say the majority of your time as a CB analyst is spent drafting internal credit memos and paperwork for a risk officer in middle office to read over. Nothing technically rigorous goes into these credit reviews either - the most you'd do is some ratio analysis and maybe a debt repayment waterfall analysis in terms of modeling, the rest is just qualitative BS for the most part. The purpose of these reviews and memos is to serve as a backstop if something goes wrong (i.e. the bank can say that it did all the due diligence possible on a client if the auditors come knocking). In terms of live deal exposure, you might get put on a financing for a transaction, but again the IB guys would own the model, so it's really not great if you're just coming out of university and trying to learn. The majority of your other deals are going to be revolver extensions and other bank financing facilities - since this is bank lending, these are almost always strong investment grade credits where there's no need to do any serious credit analysis either.
The real sweet spot for corporate banking is if you go in as a late associate or VP. Thats where you reap the benefits of having shorter hours and decent pay while also getting your own book of clients to manage. Best path is probably to start off in IB and move over later as the skillsets you develop at the junior levels in CB is frankly quite poor and hardly transferable.
Working in corp banking and here is what I like:
- Comp: so far, being top bucket, received better bonus than the VAST majority of IB colleagues with same base. Also easier to be top bucket given less competition.
- MUCH less work hours than IB (and when I work a lot, it's because I'm on a super interesting live deal)
- Work is sometimes interesting, sometimes not (this is a job, don't forget). But even I do not do 100% of modelling, each time I want I can the lead on the modelling (except for super large acquisition financing live deals in which we are super stretched.) So I have learned how to model, and, between us, it is interesting to do it but I don't understand why this is described as THE skill. Nice to have, but repetitive and time consuming stuff with no real intellectual added value. Anyway, I also worked on boring revolvers (pulling comps and dealing with the process in IB is also boring, no?), but also on very large acq financing deals, rating advisory, sustainable financing, DCM transactions, and have a unique view on how a bank work and on how corporate finance themselves.
-Culture: besides less hours, in Corporate Banking, people are more "human". You are in smaller teams, treated better
-When you are curious, you can literally call anyone in the bank and you are legitimate to ask questions, discuss, given how broad your scope is.
It is true that in the future, there is a gap in comp with IB being paid more. But at this level, you are already pulling c.$400k per year, being in your 30's, having juniors working in your team, and pulling 40 hours per week with no stress and a great brandname to impressive whoever is not working in Finance.
I don't say that corporate banking is the best job on earth, but in some BB, it seems, to me, a very fair trade-off.
In this forum, it is ver under-rated. But that is great, it is one reason why it can remains the beautiful niche it is :)
(I'm missing the business thinking on corporate operations / strategy etc. But honnestly, in IB unless you are super specialized, you don't really get this skill. More a consultant skill).
Also true that you have to give up a little bit of prestige (but prestige is only an offset to self lack of confidence) and also on some exit ops. But I see (no offence) that a lot of people here willing to spend their life to find the job that will give them the best exit opps... for the job that will give them the best exit opps... for the best exit opps.... Guys, don't forget we will all end dying (and that we don't know when !) and life is to be lived in the present (and better with some cash, and some time to spend it :) )
Agree with some of this post but a lot of what you're saying is just flat out wrong, coming as someone who's worked in both IB and CB.
Firstly your comp figures are way off - even a bottom bucket IB analyst at my BB would make more all-in than the top analysts in corporate banking. Base is also not necessarily the same as IB - depends on the bank.
The learning aspect is also objectively inferior in corporate banking - a lot (over 50% of your time) is spent on KYC and refreshing credit docs. While I agree there is still a decent amount of process work in IB, it's nowhere near as bad. The deal exposure you mention is also surface level - at my bank there are specific teams focused on sustainable financing, DCM, etc. so the analysts in those teams are going to be taking the lead leaving the corporate banking analysts with the boring process work.
You seem to also have pulled that 'pulling c.$400k a year by your 30s' number out of your ass - not sure what position you're equating this to but no corporate banking VP is making $400k unless it's been a ridiculously good year and you're up for promotion.
It's misleading for folks who haven't been in the industry to say all this and then top it off by claiming that the job has zero stress with 40 hour weeks - the corp banking folks at my firm average ~60 hours even at the more senior levels.
This is false.
What idiots in this forum don't realize is MANY former IB professionals fold into CB coverage roles, earning just as much as IB counterparts. JPMorgan and Morgan Stanley type banks do this. They literally source deals in some cases so of course they are making real dollars.
MD in my smaller international IB with a CB arm makes a couple million a year easily because he literally can source deals.
Some people are shocked that IB is not the end all be all of high paying financial careers. I'm <2 years in, and while my comp package isn't quite as high as my IB peers (who are likely making 180k as second-year analysts), I am MORE than happy to be making ~165k in MCOL working 40-50hrs. IB is just the "easy" path to high pay. If you look hard enough and luck out, you can make 90% of the money for 50% of the hours, even if the job isn't as "sexy".
2 years in CB and 2 years in IB. I really didn’t know how good I had it in CB. The pay / WLB combo is great. Can actually enjoy your life and do things outside of work