What is corporate banking?

There is a bit of inaccurate information here. Allow me to make the necessary corrections to avoid false representations of the industry.

By way of background I've held both corporate and commercial banking roles at a top BB in addition to super regional banks.

Structure and compensation will be highly dependent on the firm. To my knowledge there are only a small handful of firms that pay corporate bankers in line with IBD and those are JPM and Citi but the hours are nearly as long as IBD.

If your corporate banking group rolls up to the "Corporate and Investment Banking" arm of the bank, chances your base pay will be on par (or slightly lower than IBD) but bonus will almost always be lower (~30% of base) but lifestyle will be better.

Typically corporate banking positions will have 5-10k bumps as you progress from An1-An2-An3 with a larger bump as you move to Associate. I've seen base pay start as low as 60k and as high as 85k for a first year with 5-10k stair steps. As1 typically has a base salary of 100k across most shops as opposed to 120k. There are a few exceptions here (JPM/Citi) and perhaps Credit Suisse/Mizuho and a few other NYC based shops.

As far as to what you actually do and how much you work.

Corporate & commercial banking is providing senior unsecured and secured credit facilities (revolving credit facilities, term loans, letters of credit, bridge financing, asset-level financing) in addition to treasury and cash management products (corporate credit card, etc) to both small private companies and large publicly traded firms.

The distinction between corporate & commercial banking is based on the size of clients covered. The cutoff threshold varies by bank, but typically corporate banking clients are 500MM+ in revenues.

Corporate banking clients are financially sophisticated and have more complex capital structure than commercial banking clients (excluding middle market financial sponsor owned companies).

There are two paths in corporate / commercial banking - coverage (sales) and underwriting/portfolio management (credit).

The coverage bankers look to bring in new clients and do more business with existing clients. Senior bankers serve as a point of contact for the bank and will bring in various product partners to serve the company's need (credit, capital markets, treasury, derivatives l, M&A, etc). These bankers have junior support (analysts & associates) who support the banker with pitch books, idea generation, pipeline management, coordinating with product partners, etc.

The underwriting / portfolio management group is responsible for evaluating the feasibility of transactions and ultimately underwriting the bank's credit commitment to a transaction. In order to lend to a customer, the bank obtains credit approval via internal process (either single approver or credit committee). This team is responsible for drafting a credit approval memo, an internal document that analyzes the company's financials, capital structure, identifies & mitigates business/industry risks, evaluates and stresses projections, bench marks to peers, evaluates industry, sources of repayment, etc. Credit underwriting is fairly analytical and teaches analysts financial statement analysis and modeling. Modeling has different output than IBD (credit metrics, cash flow, etc.) but still involves creating an operating model. In addition to new deals, this group evaluates existing loans to customers and conducts quarterly and annual financial reviews (similar to layout of new deal components listed above).

Corporate banking works closely with IBD, capital markets, and other product partners as increasingly banks are focused on "delivering the bank" and providing clients with a host of products/services to enhance non-credit returns. There are lots of deal teams and the job is very collaborative.

Given commercial banking focuses on smaller companies that do not have access to capital markets, there is much less (if any) interaction with IBD.

Similar to IBD, corporate banking is a transaction oriented role and hours can fluctuate based on what you are working on. On the credit side you have quarterly / annual interim reviews that you have visibility into and aren't bad, if you are working on these without live deals hours are easy and can be 9-6/7 depending if group has face time or not. There are some transactions that require 2 weeks to committ and others much less, depending on nature of deal and how many you are working on hours can accelerate. Overall better work life balance than IBD and it's rare to work past 9PM unless you are working on bridge financing for an M&A deal. This is a generalization and can vary from shop to shop.

Typical exits for corporate banking are: -continue to promote upwards to VP+ level. Here the hours are more relaxed and pay and be cushy. All in comp can be in the 200-250k range for a 9-6 lifestyle with some travel (depending on client base) -Syndicated Finance - banks mandated as Left Lead on syndicated (multi-bank transactions) work with underwriting team to structure the loan and then "sell" the loan to other banks. There is typically an Investment Grade group and High Yield (housed within Lev Fin). - Investment Banking - most likely exits are coverage groups within same vertical as your Corp banking group (I.e. TMT Corp banking to TMT IBD) and debt oriented groups (DCM, Lev Fin). Really network dependent as you work closely IBD and it's not a hard move if you network well -MBA (to rebrand and do something else, not needed to move up) -Other finance oriented roles

Bonuses on the coverage side are larger than on the underwriting side, especially at the senior level. Underwriting side can be 25-35% depending on the shop whereas coverage could be 50%+ depending the level you are at. The difference here is that coverage bankers are revenue generators, if you bring in a capital markets bridge with equity/bond take out, you are going to get paid. At the junior level bonuses won't be as large for obvious reasons. At the junior level on the underwriting side typical bonus is 25%.