Q&A - 1st year Corporate Banking Analyst

WSO has been very helpful to me over the years, so I'm looking to offer insights to anyone interested. My background: I graduated from a target school last year and joined a top 10 US bank in CB in July. Happy to answer any and all questions. TJ

 

How important is group placement in terms of experience gained and getting to do valuable work? Interested in CB, but would like to be in a technically based role.

 

Your group placement will absolutely determine what type of work you'll be doing. My role involves providing underwriting support to several groups nationwide (e.g. large corporate, ABL.). In large corporate, you do a lot of scrubbing 10-Ks, 10-Qs, building out projection models to determine a borrower's repayment capacity based on their cash flows, and enterprise valuations. In ABL, you'll be looking at factoring facilities and analyzing a company's working capital cycle / the quality of their collateral.

Edit: ABL does project cash flows.

 

Analysts in ABL also have to run debt repayment/capacity analyses which essentially involves projecting out cash flows. Don't think for one second that since the focus of 'A'BL is the assets (most typically your working capital assets i.e. receviables & inventory) that we don't pay attention to cash flows / we don't forecast out cash flows for our borrowers. We do.

Source: Work in ABL

 

Currently in grad school (MS Fin). Still deciding between CB (preferrably underwriting/credit analyst) and RE(debt/equity placement or investment sales analyst). If you could go back would you have changed your career choice or are you happy with what your doing? Do you plan to make a lateral move or stay in CB? Hows the hours, work/life balance?

Thanks, TacticalTrader

 

If you could go back would you have changed your career choice or are you happy with what your doing?

Definitely happy with my choice. I really enjoy the analytical side of my job. Assessing corporate credit risk is complex, you really have to understand the company top to bottom (their industry, business model, strategy etc). Not to say that the job isn't without its fair amount of bitch work ~ 60-70% of my time is pushing internal processes and general cranking in Excel etc.

CB is the door into the bank for corporate clients, so I get exposure to much more than simple credit. Only a daily basis I interact with colleagues in rates and FX, treasury, and trade, RMs and Risk. I helped underwrite a bridge loan for a client's acquisition, and through the process worked with our levfin team, IB coverage group and DCM.

If you could go back would you have changed your career choice or are you happy with what your doing?Do you plan to make a lateral move or stay in CB? I would definitely go into CB again. I've had recruiters hit me up about IB gigs and lateral CB roles, but I'm happy where I am now. That being said, I'm interested in the private credit / direct lending space and I've seen former CB analysts in these jobs on LinkedIn.

Hows the hours, work/life balance? FUCKING AMAZING. Most days, I'm out the door by 6 along with the rest of my team. I've only worked past 8 once. If you're working on multiple live deals at a time, you might clock 60 hours. This is highly culture dependent though and I know our NYC team has a more 'traditional' team lead who appreciates facetime.

 

Congratulations! What type of bank are you joining?

I would recommend reading Fitch's leveraged finance primer and any credit rating industry / company reports to get a feel for credit. Reading through some 10Ks of companies you like could be helpful too - here focus on the "Risk Factors" section. Understanding credit will give you a leg up against the rest of your class. However, don't stress too much on preparing for the job. You can't really prepare that much for the day to day, it just takes time to get familiar with the systems, your team and how shit gets done in a bank. You're going to be useless initially, but work hard and try to see big picture and you'll crush it.

 

I do some work in the middle market space and I see super-regionals leading some pretty cool deals, (capital markets, sub-debt, term-loan Bs etc). You'll also work on the same deals as the BBs in a non-agent role. It's a great spot to start imo.

I started at $75K and just got an inflation raise this year, which is the standard outside of promotion years. We have a senior analyst role where you get a 10K raise on base. It takes anywhere from 18-32 months to get this promotion. Bonuses for analysts cap out at the 25% range at our bank.

 

For technicals, focus on the basic accounting section in BIWS and generally how to assess credit / the revelant metrics (leverage / fixed charge coverage etc). I had 3 interviews in CB and 2 of them asked me technicals like this - 1 of them did not super day included. You want to demonstrate your interest by knowing these basic technicals, but hey were definitely not the focus of the interview.

Your story for why CB is more important, which is something you need to figure out for yourself. Personally, I did my junior year internship in fixed income, so I knew was interested in credit. I thought CB would be a good place to build on this interest in credit while 1) looking at a range of different companies/ industries and 2) gaining exposure to other areas / products of the bank.

 

Is it possible to break into CB from private banking/wealth management after 3-5 years as a banker/client relationship manager (AUM 30-50mm) from a PB boutique (AUM ~45bn)

Is the lack of knowledge in credit analysis (beside two CB internships during BSchool) a dealbreaker? Or is it possible to leverage your selling skills and network in the region/clients (who are business owners) in a hypothetical interview?

 

One person on my team previously worked in retail banking / wealth management for around 10 years before joining CB. He was an internal transfer, however, and was a VP in retail and came over as an associate on the credit side.

On the relationship side, in my office, they don't hire large corporate associate relationship managers without at least a few years credit experience. Internship experience wouldn't qualify. For large corporate, you spend your first couple years supporting a senior RM and developing your sales skills. There no shortage of junior level credit people with 3-5 years of experience looking for these positions and, for better or for worse, there's a large bias for people with this experience.

Anecdotally, I have seen business banking / middle market RMs with purely sales background s(i.e. no credit experience). If you want to move directly into CB, you might have success targeting these roles.

 

How has your worked been affected with COVID-19? I am an incoming commercial/corporate banking summer analyst for a top 10 BB and wondering if I should expect to have the offer rescinded because there is little work to be done (obviously I know a lot can change between now and June 1st though). Thank you for any insights you may have.

 
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All of CB in my bank is working from home for the time being and there's no shortage of work. There are a lot of deal amendments occurring to provide clients more flexibility during the hard times. We are also doing a significant amount of additional monitoring for clients, especially those who are most at risk. That being said, this is not work an intern would really be responsible for anyways, due to experience gap and lack of access to systems (at my bank at least).

My guess (take this with a grain of salt) is if the CDC extends the shelter in place recommendation past April 30, your internship will most likely be cancelled. My team (and the wider industry) is certainly not going to return to work in the office before that recommendation is repealed. Maybe your bank would conduct some sort of virtual internship, but I see that as highly unlikely at the bank I work at.

 

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