This site has been incredibly helpful to me over the years so I thought I'd do one of these as an attempt to give back. I'm currently a Corp Banking Associate for top 10 US commercial bank (e.g. US Bank, PNC, STRH, BBT, 5/3). I've been in Corp Banking since I graduated and have really enjoyed it. From the south and currently live in tier 2-3 city. Married with two young kids. Marriage was harder during the analyst days but nothing terrible. I'm up for VP promote this year and will likely continue down the corp Banking path. Hours at analyst level were 60-80 per week. I'm now working 40-70 depending on deal flow. Comp is roughly 2/3rds base - currently around $200k all in. Ask away.
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Is the end goal to be a relationship manager? What other roles await you at the top?
In short, yes. Although I'd call it an MD, not an RM. at least my bank.
Other roles could be a group head and on up the chain. I don't foresee myself moving to other division of the bank.
Hi, thanks for taking your time to do this AMA. Could you explain a bit about the recruiting process for Corp. Banking and how you got to your current position? How would an undergraduate junior from a non-target best position him/herself for an analyst role in Corp. Banking?
I networked my butt off. Target the jobs you would want and search LinkedIn for your would be MDs or group heads. Ask for phone calls, be upfront that want the job, and don't be weird. Emotional intelligence is the biggest part of getting a job.
I was non-target as well, pre-med at auntil my last semester, and also an athlete (no time for internships) so I did almost zero traditional OCR work. Albeit, now that I'm in banking and responsible for recruiting at two campuses I can say it's extremely important to stand out. Spot are limited and no one is entitled to a job. Make a positive, confident impact on people and always follow up.
1.How long were you an analyst and how long have you been an associate? Also, how many years of total experience do people typically have before promotion to VP at your bank?
2.As an associate, are you more sales or credit focused?
Thanks in advance!
Analyst for 2.5 years. Early promote to Associate mainly bc I was tagged to a top notch MD who vouched for me. Now I've been an associate for two years and up for early promote again. This time it's mainly because I've taken it upon myself to do the job of a VP and I asked for the promotion. If your humble and only ask for what you deserve - it's usually given. The key discerning what you deserve, anything else is usually arrogance.
Definitely more sales focused. Although we do help the edit folks out when closing a deal on a tight timeline.
Do you know if there is path to Corp Banking from a Top 10-15 MBA? Thanks.
what type of work do you do? is it quantitative?
Mostly assisting with pitching and active mandates. Mandates for my group are typically left lead loan or bond deals. The home runs are underwritten M&A deals where IB team is engaged on the advisory and the corporate team runs the financing. My work is not overly quantitative, but there's a lot of cash flow/three statement modeling.
What options did you have after your analyst years? Could you have exited out of CB and landed well?
I had an two offers in IB groups - one internally and one at a boutique. Didn't really want to work the extra hours to be honestl (self awareness is important in finance).
I also had an offer to do FP&A/Corp Dev with a sponsor backed tech company but I didn't like the idea of doing FP&A most of my days. They really weren't that acquisitive.
I feel pretty condident I could move into a number of different fields if I wanted to - just not at the same comp level.
PE is less likely coming out of Corp Banking. I think the skills are very transferable - it just doesn't happen often.
what are your thoughts on automation specifically re: the underwriting role? in essence, I read above you're more interested in the relationship side rather than the underwriting side - why and what are some long-term trends you see impacting corp banking?
My personal opinion is that the automation of underwriting will start small and slowly grow to larger deals. Fincos are having great success generating new assets but when the credit commitments exceed $100mm you still need the human touch.
Also, think about regulation, do you believe the regulators would let a bank blindly handout $100mm to one counter party? No way.
Lastly, any credit crisis in the finco world will significantly slow down this movement - for better or for worse.
I just don't see middle market or corporate banking underwriting being overly effected anytime in the next decade.
Where does ABL sit within your bank and how does the Corporate Banking group view/interact with ABL? This is a group I'm highly interested in, but at my bank the ABL group touches everything from Middle Market clients to Corporate clients ($500MM+ in revenues)
ABL is product group that spans commercial thru corporate.
Corporate Banking Analyst here who's also working at a top 10 commercial bank and am up for promotion soon. Something I've been considering is if I want to stay in a CB type role, should I move to a Bulge Bracket CB group or unregulated shop. I've started noticing that we are losing more and more deals to direct lenders / credit funds or unregulated lenders (i.e. Jefferies, Antares) that can pitch more aggressive structures we simply can't match because of regulatory reasons or our risk team not being comfortable. A part of me thinks middle market CB is a dying business model because those banks are losing market share fast to new lending shops and also can't compete with the bigger balance sheet banks who throw large commitments (> $150MM holds) to leveraged loans.
Yeah, it's a good point. Banking regulation has certainly pushed more of the "yieldy" deals to BDCs or credit funds. However, most of my clients are BB credit profile or better that don't access those markets. Regardless, highly leveraged loans are definitely moving off banks balance sheets.
What type of backgrounds is your team open to in lateral hires (M&a, leveraged finance, commercial banking), if any, or prefer to grow and promote from within?
Of those you mentioned, lev fin would be most valuable. We also like to promote internally which has been nice for me.
What are your thoughts on commercial to corporate? Commercial being businesses with sales generally between 10-100MM.
So right out of college, you went straight to CB. You did 2.5 years as an analyst and 2 years as an associate. So call it 4.5-5 years experience and you are now pulling in $200K all-in? Am I missing anything here?
If the career is so lucrative, I wonder why CB is so much less visible in the overall finance hierarchy in terms of pay, prestige, demand, etc.
I have seen enough of this to be able to answer. In short, the OP is correct, and there's a reason why CB is less visible and generally lower on the hierarchy.
To be clear: CB is one of the best gigs around in terms of being well-paid with great work-life balance. You can make very decent (just below DCM-level) compensation for a 45-60 hour work week, and it's a more stable job.
The downside (the OP may disagree but I will be adamant on this point): almost no transferable skills and therefore exit ops, as the job is at best finance-lite. That is the quick answer for why the job isn't visible: low exit options means few exits, means longer stints, means less job openings, means less annual recruitment efforts, and also less need to hire top talent from prestigious target schools.
Until you are a senior banker owning the client relationship and strategically cross-selling products on the back of relationship-defining loans, 80%+ of the work is just about pushing internal processes. The corporate finance work is 20%, which is usually looking at capital structures and some documentation to go along with it.
This 20% can be more meaningful if your bank combines the credit risk analytics function with the relationship management function. This means you'll actually do some three-statement projection models (with a debt capacity focus, not an equity valuation focus). That could see you exiting to a credit fund, infrastructure fund or investment management arm of an insurer, for example. But the more likely exit is to a more "prestigious" part of the bank.
Interesting and good insight that was unbeknownst to me. Thanks
Because corporate banking and commercial banking aren't viewed as "prestigious", don't pay 100k+ starting to excel jockeys, and are inherently more salesy. The site loves prestige whoring, risk-averse jobs, and focused on exit opps and starting pay.
Honestly, I don't really understand the purpose of this forum at times. There are a lot of ways to make 200-300k+ in finance before you're 30-35 without doing IB or PE and in a moderate COL area (Phoenix, Dallas, Charlotte, etc.). In my biased opinion AM is the best job in the world but nothing wrong with commercial banking, corporate banking, risk, pwm, etc
I asked a question because I was curious and don't know too much about corporate banking. That's one of the main reasons forums exist. Yes, there are jobs in Finance that get you to $200-300K all-in, but not a lot that can get you there just 4.5 years out of undergrad, which would put you at 26-27 years of age give or take. The fact that you had to twist my words and extend the age range to 30-35 just to get your narrative across is quite sad.
Please do enlighten me what the "lots of ways in finance" are that can get you to those comp figures aside from PE, HF, IB and to a lesser extent VC.
Good thread. Comp seems high. I'm at a Top BB and our Corporate Banking associates (A1) don't make $200K all in. This is after 2.75-3 years as an Analyst at $85K base / 35-40% bonus.
Associates start at around $115K base I think
Im looking to transition from Middle Office Risk, Pricing & Performance type role from AM to a CB analyst role.
Do I need to be able to model operating cycles of IGC/HY credits? or do I need to be able to create a full blown M&A valuation model?
Could you go over what an Analyst actually does in CB? (I understand its different per group, but a random example would work fine) From my understanding it is not too different from what an IGC/HY Credit Analyst at an AM does on a daily basis.
Thanks for doing this, appreciate it!
dup
Have you seen Commercial Bankers ($25MM-$500MM in revenue) jump to Corp Banking? If so, at what levels (IE - Relationship Management, portfolio management, etc).
In example - in my area (California) Wells Fargo is strong in mid-market banking or their RCBOs (Regional Commercial Banking Offices). If you are a strong RM in that setting, do you think those skills transfer over to Corp Banking? By skills, it really is primarily sales in those roles and obviously the more finance and accounting savvy you are, it really helps in being an advisor and helping you in the sales process.
I would think there would be somewhat of a steep curve to learn the capital market products (issuing bonds as opposed to doing a loan that sits on the balance sheet) - but do you think the "good" commercial bankers can learn it and excel at it?
IMO, even at the higher levels of IB (and really across all industries) - you at some point will have to comfortable selling and winning over clients. There will always be a back office or an analyst that can do the excel grunt work. I would think if you are successful at sales at the mid-market level, you might have a shot at the Corp Banking levels (excluding any academic pedigree background, etc).
Also - the reason I ask is that I work at a Community Bank. The biggest clients we see at the upper end is $150-$200MM in revenue. The majority are in the $5-$50MM revenue range.
And you would be surprised how much I get recruited by mid-market shops who target companies $25-$500MM in revenue.
So obviously I may have a client or two that would fit into the mid-market division of a BB - but that is about it. So I guess they assume that the transition from a community bank to a mid-market bank is not that difficult, and if I have been successful at dealing with Mom and Pop shops, I should be able to figure out how to deal with regional $500MM a year businesses.
Just wondering if that would also apply from going mid-market to corporate.
Great question.
I've done lower middle market lending as well as large corporate lending and have interacted with RMs / coverage bankers on both sides. This is all anecdotal based on my experience at both the top BB level as well as the super-regional (T20 bank) level.
At the the lower level (business banking / middle market) I have found RMs to be less sophisticated when it comes to understanding capital structure, credit, and general analytical concepts. I have found individuals to be more relationship building focused (playing golf, building rapport) but not really being a strategic advisor to their clients.
While there are always product experts (credit, syndications, capital markets) a coverage banker should really know enough to be dangerous. At the BB level, a coverage banker typically knows the industry well and has a strong analytical skill set and can provide value add advice to clients. Imagine if investment bankers only played golf with clients and roped in product partners but did not have strategic dialogue with their clients....that would not go very well and they would not win many mandates.
I think it really depends on the structure of the shop you work at. At some shops corporate banking is the face of the bank and is primarily responsible for spotting opportunities and roping in the right partners. I think this is an easier transition. Also other shops that do not have a substantial investment banking platform are much more bank debt focused (i.e. Citizens or Regions) as these shops typically consider Syndicated Finance = investment banking as they do not have strong DCM/ECM/M&A capabilities.
That would be a much easier transition than going to a shop where corporate banking is responsible for generating capital markets revenue since that is more of an apprenticeship model. You need to really be supporting the bankers from a junior level (analyst or associate) and running deals before you can step into a role like that. Almost no-one comes in at the VP+ level without having prior experience as such a person would not really be effective in an environment like that.
Thanks for your thoughts on that and I tend to agree with what you are saying.
I will say that most bankers dealing in the smaller or lower middle market space are not value add bankers or have the analytical ability to be more consultants to their clients. They are more like used car salesman peddling whatever product the Banks asks them to without understanding financial implications.
However I have also found a lot of people who are technically very sound and know the ins-and-outs of accounting and finance. It sounds counter intuitive but when you are dealing with smaller clients who aren't very sophisticated themselves, you have to take on a lot of the burden for the financial analysis work, projections, etc to get through internally because the client cant produce it themselves. I have seen Bankers come from Big Banks who barely even know that A=L+E. Have also seen bankers come from very sound community or regional banks who can model the 3 fins and have great credit chops - but they just didnt feel like moving to a bigger market or going into the bureaucracy of a BB,
Thanks for your input.
I'm in a product group in CB (Commercial) and my group does a TON of three statement models. We also work on DCF's. I deal with mostly Corporate clients ($750MM+ revenues). The coverage group handles the ancillary stuff and my group does the modeling. From a risk standpoint.
An example transaction for me is, let's say my bank has been mandated on a new Senior Secured Term Loan transaction. Coverage/DCM, etc. will handle putting the materials together and what not. Because my group maintains the primary credit facility, we'll put together a projection model, determine debt repayment statistics and run a DCF model. We'll also put together a credit memo summarizing the transaction. We'll run pretty detailed analysis on mergers and acquisitions, moreso if the company is utilizing the revolver to fund the acquisition. I work on a little bit of everything.
We'll work with LevFin and partner with them to put together some of the slides that will ultimately go into the pitchbook that the coverage team puts together.
Hours are about 50 a week. I'd say it's 40% internal processes and 60% transactional work. Again, we are responsible for most of the modeling work (and that includes DCF's and EV) because we maintain the primary credit facility with the client.
I've seen plenty of exits to random credit funds, lower MM PE groups, DCM, and other non-bank credit groups.
EDIT: Don't get me wrong, I also work on cookie cutter $1B syndicated revolving credit facilities.
From what you're saying, it sounds like your bank splits the relationship management component and the credit component into two groups: Coverage, and your group. Since your group has ownership on the bank's view of a credit, it makes sense that your work is focused on corporate finance. Therefore, yes, the exits you describe also make sense and are consistent with what I described (with the exception of lower MM PE - I don't know any Corporate Banking junior who has done that, but this can also be a function of different markets). When you factor in different banks and different geographies, there can be some variability in the experience. I've seen and compared three statement models at my bank's Equity Research, IBD and CB groups, and there is a noticeable different in both the focus and degree of complexity. Good to get a broad view.
Throughout the industry, though, Corporate Bank is more generally understood to mean relationship management, which may or may not include the credit function. As for the split in work, I don't doubt what you're saying (indeed, it makes sense since you are in essence a Corporate Lending product group), but even that 60% transactional work still involves a lot of internal processes.
A more personal question, so feel free to decline to answer if you'd like.
How is your lifestyle on a 200k all-in comp package in a Tier 2/3 city? Do you own house? Vacations? Does your wife work?
What does salary progression look like for you? Is there room to get from 200k to 400k?
Own a large house in the most prestigious gated golf course community. Wife stays at home with the kids and drives a new SUV. We take vacations whenever and wherever we want without worry. The city we live in has about 300,000 people so it is not like it is some po-dunk 2,000 people cow-town.
And yes - plenty of runway for salary progressions although need to get to Executive level which is highly likely to happen given the age of our EVPs and not a whole lot of internal competition/bench to replace them. Our EVPS have all-in comp packages ranging from $600-$1MM depending on experience and tenure. Newly minted EVPs are pulling in cash of $350-$400M. Our most tenured EVPs are pulling in $600M cash with about $400M in stock awards.
One more thing to add:
My bank combines the Credit Risk functions with Relationship Management. As an Analyst though, I'll have a role in both sides of new transactions (Sales/Originations and assisting the Senior guys with underwriting) and also the Credit Risk/Relationship Management function (maintaining the existing relationship, handling requests, etc)
My group is lean (less than 30 analysts in this group across the U.S.) so we get a chance to touch everything. It's not overly Sales-oriented, nor is it overly Credit-Risk oriented.
Hey, thank you so much for doing this! I know there are a few threads but I have a 1st round interview tomorrow for CB role and would love your input.
I was wondering what type of questions should I expect and be studying for tomorrow's interview as well as for hopefully superday (technical and behavioral)?
Also, I was wondering what qualities do you personally look for in applicants?
Thank you so much, really appreciate it!!Kinetic Friction
What are the life style differences between Corporate Banking and DCM?
Why does Wells Fargo Corporate Banking pay so much less than the Citi/JPM/and to a lesser extent BAML?
At what point in the hierarchy, for non tacky financially responsible (i.e. no red ferraris/gold rolexes) do corporate bankers and investment bankers really start to become financially different in terms of different spending habits, socioeconomic levels, cost of housing (apartment/mortgage), clothing spending, and nightlife activities. I would imagine that for analyst and associates, even if IB pays more, with after tax earnings the apartments that corporate bankers and IBers rent, their suits, bar tabs, etc are pretty similar. When would you say investment bankers really start to differentiate themselves from CBers? VP level?
As an associate looking to make VP, how involved do you get with the legal negotiation, structuring, etc. for your deals?
Kinetic Friction
Great post, thanks for doing this. I'm also in corporate banking but on the underwriting / credit side. Was at the associate level but made a move into a commercial bank structure at the VP/PM level, work-life has improved but career trajectory has slowed down.
Does your group roll up into the "corporate & investment banking" arm of your bank? Your comp level for corporate banking is industry leading for a non-NYC BB or international bank. Typically JPM/Citi pay the highest in addition to a few banks such as RBC and everyone else pays much lower base / bonus at the junior levels. Based on comp I'm actually 95% sure I know where you are but won't mention publicly.
What have you seen and heard as far as cost cutting initiatives and how has that impacted your group and those that you work with?
Lots of cost cutting in the industry right now, particularly on the credit side in terms of limiting headcount, salary compression, flat bonuses, and not replacing headcount or replacing departing teammates at more junior levels. My opinion is the direct revenue generating side of the business is spared the worse of this but would be curious to hear your perspective.
How does comp work at the associate level, what are annual increases?
From a workflow perspective, I assume you are pitching various capital structure alternatives and doing modeling around that and dropping it into pitch books and directing traffic as far as analyst workflow and internal processes go. Once you are mandated on a transaction I assume you step off and let portfolio management, IBD, capital markets run with it depending on the nature of the deal.
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