Dec 08, 2021

BofA Wholsale Credit vs Credit Risk

BofA has a global wholesale credit team, which seems to have vaguely similar responsibilities to a typical CIB credit risk team as I understand it, but BofA also has a credit risk team within global risk management and I was wondering what these two teams actually do. From some reading I've done online it seems like wholesale credit is considered FO because they get some client interaction while credit risk is definitely MO. This made me think that wholesale credit might be more like corporate/commercial banking than credit risk but BofA has corporate and commercial banking teams. I'm also curious about what the comp and hours are like at different seniority levels in wholesale credit at BofA.

 

It's credit analysis and portfolio management for credit facilities that the IB and CB team originate/produce. If the bank is using its balance sheet, that team is involved. It's also ongoing maintenance/coverage of whatever existing credit facilities borrowers have with the bank. BofA has it separated into industry groups like most places, and you're generally assigned names in the portfolio and work alongside the credit officer (D/MD level) with updates in their sector or specialty. 

For instance, an officer may be a specialist in Autos or something and you're in the industrials group. You may be staffed with that officer, while you still have credits in paper/packaging or manufacturing or whatever. The GCIB credit teams are the credit side of those IB/CB transactions while risk is risk. The teams balance creditworthiness/risk with being more "commercial" and trying to get deals done if that makes sense. 

I interviewed with a handful of these types of positions across BB's a while ago, so someone should let me know if I'm wrong. Speaking of comp, I think GCIB across the board for BofA gets the same base as regular IB/CB but a discount on bonus obviously.

 

Spot on. Basically you are the middle man between risk and corporate banking, capital markets, and sometimes trading. You’ll be involved in structuring, originating and negotiating credit agreements for senior bank loans. The other half of the time you’ll be doing portfolio management stuff. If one of your assigned clients is working on a M&A transaction you’ll also work closely with M&A if there is some type of senior bank loan that goes along with the transaction. Overall, pretty chill hours unless you have a transaction in the pipeline.

You’ll be getting good experience and can lateral into levfin, private credit, corporate banking, or DCM pretty easily if you chose to.

 
Most Helpful

I can provide some color. Background: I did a stint in BofA WC as an analyst in NYC but have since left to do IB at a BB/EB. Feel free to reply with any questions.

TLDR: consider Credit if you prioritize work-life balance but want exposure to the financial industry.

If I were to summarize WC into two sentences, the function of Wholesale Credit is to underwrite loans (typically credit facilities) to companies or HNW individuals. Financial exposure is limited to looking at the three financial statements for any red flags so little to no modeling work.

The difference between Wholesale Credit and Credit Risk is that WC underwrites the deal/facility and presents it to Credit Risk for input/approval. Credit Risk guys are usually a lot more senior with a lot of experience in lending and are usually VP+ level (0 analysts/associates). WC guys are the foot soldiers (Analysts -- MD) analyzing the financials and putting together the risk ratings and Credit Approval Memos (which are 10-15+ page docs explaining lending thesis and risk mitigation) for Credit Risk.

Groups: Most coveted divisions due to location (NYC) and exit opps are GCIB Credit, Global Markets Credit and CREB (Commercial Real Estate), though quite a few teams within those are also based in Charlotte. Everything else (Commercialized Lending, Middle Market ABL, GWIM, etc.) are not great in terms of exit opps due to the nature of the work and location (very small cap companies, family offices, etc. + based in Charlotte). I have noticed the people in GCIB Credit and Global Markets Credit come from both target and non-target (a few UPenn/Cornell/Columbia kids). The other divisions are almost exclusively non-target.

Hours: Mon-Fri, 9 to 6PM across all levels. I did not work one Sat/Sun. Some VP+ people occasionally leave at 4PM on slow days. You can leave earlier if you/your team have nothing to do. When there is a "fire drill" (very rarely) expect some 9PMs. WFH is completely team-dependent (e.g. GCIB Credit Energy will have different WFH policies than GCIB Credit TMT).

Comp: 1st year analyst base is $75k. 2nd year analyst base is $80k. Bonus dependent on group/team (my annual bonus was $20k last year, which was considered a "bad" year for the bank and bonuses). Not bad considering you work max 45 hours/week and have a lot of downtime during the day (30 of the 45 hours is "real work"). After that, it is all dependent on your background and division/team-- base/bonus is not as standardized as IB. I know of some Directors (age 40-50) who make $500k+ working 9-5PM and some VPs who make ~$150k working the same hours. The best way to get a better comp is to lateral to do Credit at another bank and get a raise.

FO/MO: Combination of both depending on division/team. How it works in GCIB Credit is the corporate bankers (the "Front Line Unit") will send you a potential deal you will have to underwrite but during that process, you have the opportunity to jump on calls with the client if needed (esp. if deal is a bilateral financing). Besides analyzing financials and writing the Credit Memos, you will also have to process the loans and monitor your lending portfolio whenever there is a financial statement released (update your internal risk rating scorecards).

Exit Opps: Not a ton to be completely honest unless you work in GCIB/GMC/CREB for a very financial-analysis focused team with heavy deal flow (e.g. GCIB Credit TMT). The most common exit opp is jumping to another bank or staying in Credit as a career banker. I know some people who have jumped to ER and Sales (S&T) from WC but it took a lot of outside effort and is generally rare to see. A lot of the people in my division are family-oriented and have been with BofA WC for the majority of their careers-- easy to get stuck at the VP level. Contrary to popular belief, Private Credit or other credit related buy side opps are NOT exit opps from Credit. Though it is rare, you can lateral into IB from the same credit coverage group (e.g. Energy Credit --> Energy IB or LevFin Credit --> LevFin IB) if you have studied extensively and networked outside of work. Typically that would entail restarting as an Analyst/Associate.

Pros: Great work life balance, pay is decent considering true hours worked. People are very understanding of personal commitments as they themselves are WLB-oriented. At times might have lending deals to interesting companies. Directors and MDs are genuinely nice people who care about your career and development and are generally open books b/c they have families/kids themselves. I believe BofA is one of the best banks to internal transfer.

Cons: Repetitive nature of work (analyze financials, complete risk rating scorecard, write up CAM, repeat). Very operationally intensive as you also need to process the loans and monitor your portfolio on a quarterly basis. Exit opps might not be as great for specific divisions/teams. Culture of my specific team was not great-- it was dictated by one MD that mandated we had to come in everyday while the rest of the floor was empty. 

 

Not sure how long its been since you were in the group but at the time you were there was the base salary for the IB team and GCIB Credit team similar for analysts? I am wondering since its all GCIB if the recent pay increases are across the board and apply to the credit team as well at from a base salary perspective.

 

No, they are not the same even though they are under the GCIB umbrella. I did not leave Credit too long ago (within a year). For 1st year analysts at BofA, I believe IB starting base is $110k now while WC base is at $80k (also heard from friends that bonus was $16k - $20k this year for WC). Definitely a big difference, especially when you include bonuses.

 

Your information was very helpful, appreciate it.

BTW, i still can't decide my mind whether to go for it. I'm currently waiting for first round interview.

I'm not a "must-IB", but I still want to engage in a division that could be described as "Front Office" which basically does influential and dynamic works.

Can you give me some more advices? Should I go for WC?

 

I cannot with a straight face say that WC is front office (more like middle/front) as you do have some client interaction if/when the corporate bankers ask you to join a call to provide additional analysis and ask DD questions (though this happens less than you think). Note that this is only for specific groups -- some groups do not have client interaction at all so it really depends.

This being said, WC does influence whether or the bank lends to a client (which can be easily overruled by corporate banking/credit risk), but isn't exactly "dynamic" as one would characterize other fields in finance.

Like I said above, you should go for WC if you prioritize WLB while maintaining a decent salary given hours worked. 

 

Thank you for the thorough write up been looking for something like this. Any chance you know how they select people for the groups? I'll be interning there this summer but they haven't put me into a group yet. I have an IB internship under my belt and I've talked to a few alumni that work on the levfin credit team but they all basically said it's different now and they think it will be just the luck of the draw? I really wanna be on the lev fin team but idk what I should do to get there.

 

It’s completely random (HR will “factor in” your resume). Best bet would be to reach out to HR directly and request.

 

Will argue there are good exits. Worked at BofA when I started out in the industry and during the 2 years I was there. 1 analyst went to BofA IB for same coverage group, 3 went to big name Private Credit shops, 1 analyst went to consulting, and 1 Associate went to Corp Banking. 

 

This is accurate. Was in GCIB Credit in an industry team. WLB was great, pay was not bad considering I was in a low COL city, but its significantly below Corporate/Investment banking. You get great experience in understanding credit analysis and exposure to lots of deals ranging from M&A/Refinancing/Restructuring/etc... (I was in a group with plenty of new deals).  As an analyst, job is to write CAMs and deal memos as well as portfolio monitoring. Group wasn't too modeling heavy but certain deals would require modeling and I would practice on my own time.

The job does get very repetitive and as a large bank, BofA has lots of regulatory/policy/procedure work which would be the analysts job to complete. Did not enjoy this part.

 The senior people you work with it are great for the most part, very flexible with you since they are family people. I could travel whenever I wanted (I would avoid traveling during busy season), and people would not bother me.

I think only GCIB Credit and CREB are really worth it.

Overall, pretty good spot to start your career (if in GCIB Credit/CREB). I did two years and transferred internally into a research role at the bank.

A couple people from my team went into Private Credit, Investment Banking, and Research (Equity/Credit). I would say not a great spot for private credit exits (even though work is similar) due to perspective of being a back office role (even though its not really).

 

Hi, this was really insightful and relevant to my situation. I'm currently analyst 2 at MM CRM, which functions very similarly to WC at BoA per your description. My goal is to eventually transition to a buyside role (currently focusing on pvt credit) but also realize might need some additional experience in IB as you mentioned if I want to increase my chances in PC but also open doors to PE. I have received IB training along with this year's class of new IB joiners. Also, I extensively work on modelling skills individually using banker and sponsor models received during live deals and case studies from the aforementioned training. I personally enjoy the WLB and my manager hinted at promotion to associate this year (FYE March so meeting was very recent), with a guaranteed promotion by next year. I wouldn't mind staying in my role, getting the promotion/raise, and developing my skills myself. However, I am happy to look for an IB role to position myself for the buyside, which is my top priority. As someone who moved from WC to IB, what were the major changes, how difficult was landing the role, and how are you liking it so far? 

 

Commenting further. Did a year and a half of GCIB Credit and moved to buyside in a direct lending role at a tier 1 fund. Several coworkers also left around the same time to similar exits.

 

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