Wasn't sure if this was the best forum ask this, but for any folks with corporate banking experience, what made you choose corporate banking over other areas (like IBD) and what kind of technical questions could I expect?
As to why corporate banking: For me, the main reason is that I think it's an area where I can add value the most, having prior experience in banking regulations, and also because I like the idea of analyzing in detail the drivers of a company's performance as opposed to valuing a company on a holistic basis. But I'm not sure how acceptable of answer that would be.
Also, I've researched the forums and it seems like I should expect similar technicals to IBD, but probably with a stronger focus on debt. Is that correct?
What is Corporate Banking
Corporate banking (also known as business banking) tends to deal with lending capital and selling services towards small and mid-sized businesses.Corporate banking is often a crucial profit center for most banks as it provides a vast majority of regular write-down loans. These services may include:
- Loans and other credit products
- Treasury and cash management services
- Trade financing of bill collection, letters of credit
Corporate Banking vs Investment Banking
While Corporate banking may seem like a more relaxed alternative to investment banking, there are downsides to this choice, namely lower pay and worse exit opportunities. However, @IBBD makes a great claim as to why corporate banking may be more appealing:
1. Long term career potential - not much of an "up and out" culture like in IBD. As long as you are competent, you can move into an associate role after your third year in most places. You won't need to go back for an MBA to advance. Also to get from associate to VP in the credit path, you won't need to be able to generate business to move up as you would in IBD.
2. Better hours / work-life balance
3. You manage risk if that is something you are interested in. The spread on senior bank debt is low, so you need to be careful when making a decision as you will have to originate a huge multiple of your loss in new money just to be able to cover it.
4. You develop a solid foundation in cash flow analysis and learn about collateral (depending if it is ABL group or middle market lending vs. large corporate).
5. Corp banking is very relationship focused.
6. Ability to move from client management/credit/risk, so you can have a very varied career depending on how you position yourself and what your interests are.
7. Can be a generalist or cover industry vertical depending on what group you are in.
Corporate Banking Potential Interview Questions
As with any other interview process you can be asked both technical and behavioral questions.
@b2banker provides some helpful examples as to some technical questions to prepare for:
As far as technicals go I would know:
-Accounting type questions: how the 3 main financial statements interact
-Basics of how to evaluate a credit worthiness of a company
-An understanding of the role / industry, what banks do, what you will be doing, etc.
-As far as technicals are concerned if you have the WSO/M&I technicals down tight (ignoring all of the valuation, etc. type stuff) you will be good to go.
If you have any experience regarding potential interview questions and your overall experience in corporate banking please comment below!
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