Corporate Banking Interview questions?

Delta Storm's picture
Rank: Orangutan | 318

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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Comments (31)

Oct 12, 2014

Corporate banking is like a mix a cross in between an IB product group and a coverage group. CB is segmented by industry verticals and you delivery debt products to companies (revolvers, term loans, bridge financing, etc).

In your underwriting you will be doing plenty of company analysis (financial / operational) and industry analysis. With that said you will have a better understanding of your industry and how your clients operate in it than a Lev. Fin analyst who will be doing all models all day but has no clue about how these companies operate. You also have long term career potential in CB as you can directly promote to Associate, VP, etc without having to go back for an MBA.

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.

Let me know if you have more questions.

    • 1
Oct 22, 2014
B2Banker:

Corporate banking is like a mix a cross in between an IB product group and a coverage group. CB is segmented by industry verticals and you delivery debt products to companies (revolvers, term loans, bridge financing, etc).

In your underwriting you will be doing plenty of company analysis (financial / operational) and industry analysis. With that said you will have a better understanding of your industry and how your clients operate in it than a Lev. Fin analyst who will be doing all models all day but has no clue about how these companies operate. You also have long term career potential in CB as you can directly promote to Associate, VP, etc without having to go back for an MBA.

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.

Let me know if you have more questions.

I am really interested in getting into a corporate finance development program, but I am coming from a non-business degree. What should I do to prepare for this, and is it even possible? I'm hoping to end up in corporate strategy, and think this would be a great place to start out, while really gaining finance and accounting experience.

Oct 22, 2014
B2Banker:

Corporate banking is like a mix a cross in between an IB product group and a coverage group. CB is segmented by industry verticals and you delivery debt products to companies (revolvers, term loans, bridge financing, etc).

In your underwriting you will be doing plenty of company analysis (financial / operational) and industry analysis. With that said you will have a better understanding of your industry and how your clients operate in it than a Lev. Fin analyst who will be doing all models all day but has no clue about how these companies operate. You also have long term career potential in CB as you can directly promote to Associate, VP, etc without having to go back for an MBA.

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.

Let me know if you have more questions.

I am really interested in getting into a corporate finance development program, but I am coming from a non-business degree. What should I do to prepare for this, and is it even possible? I'm hoping to end up in corporate strategy, and think this would be a great place to start out, while really gaining finance and accounting experience.

Aug 12, 2016

I am a fresh MBA graduate. I have an interview with HSBC for corporate banking profile. However, I don't know what should be my answer to "Why Corporate Banking?"

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Oct 22, 2014

I wouldn't expect anything too technical probably mostly fit. This is no an Ibanking internship and i hope you realize the difference between commercial lending and leveraged finance.

KICKIN ASS AND TAKING NAMES

Oct 22, 2014

Other than knowing a banks balance sheet and the difference between bank lending and IB type dept it will be entirely behavioral and fit.

Oct 22, 2014
Oct 22, 2014

Corporate banking = lending to large companies with 2+ bil of revenues. Think term, revolver loans as well as syndicated loans.

Know what you need to look at to evaluate a company's credit worthiness as well as basic financial statement interactions, etc. If you have the technical guide from WSO or BIWS/M&I you will be more than ready.

Oct 22, 2014

This is for their SF office

Oct 22, 2014

its usually behavioural interview, unstructured... chill and show that you are a nice/interesting person; follow up and thank afterwards

Oct 22, 2014

Usually phone interviews are more on the fit side. For the superday, know your financial statements, what types of credit facilities you can provide to companies, what makes a good borrower type of questions.

Oct 22, 2014

anyone? Thanks!

Oct 22, 2014

Interviewed with their Corp Banking group last year for SA. 1st round was 70% tech and 30% fit. Tech mainly consisted of accounting/fin analysis; no valuation. Linking the 3 financials, run throughout the components of an income statement and CF statement, depreciation through the 3 financials, what questions would you ask when making a loan.

Fit was your typical strengths/weaknesses, did you get any feedback from prior internships, etc.

    • 1
Oct 22, 2014

similar for real estate?

Oct 22, 2014

No clue for RE. Assuming it is RE focused.

Oct 22, 2014

Went through the SFAP program last year as a GIB intern (specialized group within commercial banking). When I initially applied, the commercial banking and corporate banking programs were posted as two separate positions. However, they interviewed for all positions at the same time which was slightly confusing as they didn't tell anyone beforehand. I would suggest asking your recruiter what groups are looking for summer interns (RCBO, GIB, Sponsors, etc.) so you can tailor your responses to whatever position interests you the most.

Interviews were pretty standard. 1st round was primarily "fit" questions, and "walk me through your resume". 2nd round was a superday with 6 back-to-back interviews. A lot more technical, but nothing difficult - what TGICapitalism posted. Know what EBITDA is (the majority of final round candidates I had talked to were stumped by this.. how, I have no idea). Also, you should be able to identify the most important financial statement from a lending perspective.

I'd be happy to answer any other questions you may have about the interview process or the program in general. Good luck with your interview!

Oct 22, 2014

Hi TopApe, the final round for commercial banking is this Friday. Any specifics on the technicals one should brush up on before heading into this? 6 interviews back to back?! That's somewhat terrifying.

"Two Stolis on the rocks."

Oct 22, 2014

The interviews are mainly behavioral to ensure you "fit" within the group. There may be one technical question, but its mainly to get a feel for your knowledge of how the financial statements fit together.

Oct 22, 2014

You need to give us a better description of the position. Generally, credit analytics is a middle-office type role where you're analyzing a bank's loan portfolio or trading portfolio. In other words, you're assessing the firm-wide exposure to different industries, overall credit risk, etc. and making recommendations to the credit approval committee.

If the above description fits the job description, it's unlikely you'll encounter many of the traditional IB technical questions. However, you should know your three financial statements and their relationships cold, be familiar with credit risk, know bank covenants and what they do. Never mention that you want less hours in an interview regardless of whether it's true or not either.

Oct 22, 2014

Thanks for your help! The description I have been given is pretty general, basically states that the internship would be an introduction to Corporate Banking and require researching market data, analyzing financial statements, and performing risk analysis and due diligence. There wasn't much further mention of the credit analytics other than that title itself. Thanks!

Oct 22, 2014
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Oct 22, 2014