Career Banking in Canada?

NYCorToronto's picture
Rank: Monkey | 44

So I've been hearing a lot of stigma against career bankers. Some even saying that a career banker isn't a good choice for a career.

In Canada, most bankers will stay in banking as exit opps aren't as plentiful+they pay worse. Big 5/BBs both pay pretty nicely at VP and higher up levels so is there any reason not to become a career banker in Canada?

Comments (17)

Apr 10, 2018

just do it in NYC. you may find out that banking isn't what you want to do for the rest of your life, and you don't want to be stuck there for 20+ years if you find that out.

Timing Is Everything.

Apr 10, 2018

There isn't really a reason not to do banking in Canada as a career... As you mentioned, there are fewer exit ops in Canada, and it pays well. I suppose the only thing is, if you lose your job at say the VP/ED level, there are fewer opportunities to lateral into given the smaller market (either to a different bank, or something in industry). If you can't because of a bad market and lean teams here, it could take awhile to find a new job, or you would have to take a severe pay cut.

I didn't do my IB stint in Canada, but just something I've observed (and Canadian bankers feel free to comment / correct): because the market is smaller, so is the pool of client companies that are already spoken for. You'll need to demonstrate you can bring in business, but all the large firms already have their favored MDs/relationship bankers. So unless you find the next Shopify, and develop those relationships early before it becomes a potential whale or meaningful enough sized opportunity, you're probably waiting to get put on clients and inherit them if the MD(s) leave (which, could be ages). So in the meantime, if the market turns sour, the first set of layoffs will hit the VPs (aka super expensive, non-PnL generating associates)

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Best Response
Apr 10, 2018

I agree with what you said (and I am also not a career banker, although I know quite a few), but wanted to add a few thoughts. While the Canadian market is definitely smaller, it's also much less competitive. A significant amount of IB work won by the Big 6 is through relationships (mainly lending) rather than by the strength of their Investment Banking platform (the Big 6 tend to be lumped together, but there are material differences in the quality and depth of knowledge of each and some have not so great IB platform). There's 5,000+ banks in the US, but only 6 in Canada (plus a handful of smaller banks and credit unions that don't really have too much of a foothold in the commercial lending market) so corporates don't really have a choice to bank with one of the Big 6 (usually 2 or 3 are lead lenders). Therefore, it's really hard for a corporate to say, issue some equity and not give a significant piece to your lenders so Big 6 get a ton "easy" business. So while showing the ability to bring in some business is crucial, so is the ability to maintain / improve relationships with existing clients and I feel this is somewhat easier to do (just make sure you pitch twice you height every year ;). Canadian banks also tend to be more conservative with hiring in good times, but then don't really ever do mass layoffs. People will definitely get pushed out if they don't perform or if there isn't a path up (really common since groups tend to be super small and can only support so many MDs), but I think the environment overall isn't as cutthroat and the chances of staying in once you have your foot in the door are much better than in NYC. At least 50% of the MDs at the bank I spent my analyst years at (and I worked for one of the better banks) started at the bank as analysts and made their way up, something you really don't see as often in New York.

To the OP though, there are very very few true career bankers. Even if Canada is a bit more cushy, banking is still banking and very few analysts / associates make it to MD and those that do tend to have a shelf life of around 5 years. In terms of starting your career, if you have the option between NYC and Toronto, take NYC. You'll have a more focused experience and if you ever want to come back, it'll be super easy.

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Apr 10, 2018

Great advice. Especially pay attention to the last 2 sentences OP. It's way easier to go from NYC to Toronto than vice versa

Apr 11, 2018

Thanks for the advice.

I'd love to take an option in NYC but for me, the only possible option would be for an American bank to recruit from my Uni which happens but is fairly difficult.

As for the last part, other than IB there isn't many exit opps in Canada. There's always Onex but they're very competitive and only take a few people. Other than that there's pension PE's but usually the comp is way worse. This is the reason I'm considering the path of a career banker.

I had a few questions about some of the stuff in your post though. When you talked about people being pushed out due to there not being space a the top for promotions, do these people usually get laid off or just leave due to them not wanting to wait anymore?

Also, what did you mean by shelf life of 5 years? Is that because the bank eventually pushes them out or they leave by their own accord.

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Apr 11, 2018