Credit Analyst as first job
This is my first post on WSO if we could keep the shit throwing to a minimum that would be great. I've been reading through credit analyst related topics and was looking for some more information. I was wondering if this was a good first job out of undergrad and what some potential exit opportunities may be. I decided to start an new thread, because all the responses on other threads say pm me. Thanks in advance fellas
I'll just pass on what I've heard from others, for whatever that is worth to you. I'm still completing my undergrad and am trying to decide between Big 4 audit and credit risk. I'll be interested to see other responses to this thread.
I was told by someone in credit risk at GS in SLC that people leave to get their MBA (some get top 15 schools), positions at hedge funds, transfer to other departments within the bank, or leave for positions in the finance department of F500 companies. Again, I'm relaying what someone else has told me...so you can take it with a grain of salt.
It depends on the type of work you prefer. Two different areas. Big-4 more competitive.
Currently work in credit risk at a BB, previously worked in B4 audit. It's a pretty solid group. People here usually get their CFA and/or MBA and transfer to an HF (some of my senior colleagues made it into Blackstone I believe). Some people lateral into the IBD world as we talk with bankers a lot. Haven't heard of anybody going to an F500 from this office.
Also should be noted that at JPM your comp as a credit risk analyst will be on par with IBD analyst's. Overall the value of risk managers is increasing lately and bonuses have reflected this.
It's well known that base is the same as IBD. It's very difficult to believe that credit risk analysts at JPM get the same bonuses as IBD.
As that may be, I have heard this from several people including one that works there and RM bonuses have been really high across the board this year due to CCAR and other regulatory/compliance initiatives which require banks to both attract and retain risk management talent.
I am not a credit analyst, but I have a couple friends who do it currently. Apparently there is a division between middle office credit roles and front office. Front office being client facing, and middle office being more number crunching behind the scenes. These roles may not be divided at all shops, but in any case, be cognizant of it when going about your search.
It's called corporate credit risk. Corporate bankers go out and get new clients for the bank while corporate credit risk underwrites the various debt facilities requested by the clients and maintains relationships with current clients when they have new requests.
OP, are you referring to credit risk or credit research? Different things, both solid entry level positions (with slight edge for credit research IMO).
That's what I've heard as well. It's just a credit analyst position
For what its worth I started as a graduate in credit risk at a BB but not in the US. In my first year I was probably writing up anywhere between 3-6 deals a week average ticket size $10M but sometimes up to $100M, so we weren't doing the big ticket corporate unsecured notes but still dealing with mostly investment grade clients in Europe, Asia, US, Australia, etc. Starting in risk management gives you a pretty good foundation in banking. It really depends on which team you're in, how the team is set up and what the product is that you're underwriting, but in general you pick up skills and knowledge which are in high demand - financial analysis, accounting, legal, operations, risk structuring, credit ratings, etc. After two years I lateraled into a more specific natural resources deal team where I'm still responsible for the risk analysis on deals but have more direct involvement with clients - discussing business strategies and results with C-level execs, mine sites visits for DD, working on business development opps etc. From here it's a natural progression to front office but that's just my own experience which is not necessarily compatible with most banks. But I also have a colleague who started in a similar role who just moved into PE, another was offered an analyst role at Linkedin, so the exit opps can be quite varied.
In summary credit can lead to many paths because the skills you pick up are in high demand across all spheres of banking. Only caveat is don't stay too long because you could risk being typecast into a particular role. Good luck.
Depends on what you're doing specifically and the people you're working with, but could be decent. Because credit analysis tends to be very cash flow and downside focused I think it gives you a good foundation for the investment world. At least better than starting off in some equity related role where people are just making up random growth projections and fudging some random multiples and using that BS soup to punt some money around.
http://longorshortcapital.com/ebitdagsac-a-guide-to-cash-generation-for…
@Going Concern: This is true. This is why FI guys have been deemed to know more about the equities than equity guys. Being downside focused early on in your career can be a great training camp...SB+1
This is funny because it's true.
At the small commercial bank I worked at before the BB and from what I have gathered from middle market banks I interviewed at, as a credit analyst you will work directly with the banker and usually be expected to become a banker going out and getting new business after you have spent 3-4 years in the analyst program. In BB corporate banking, credit risk is a separate department, and the credit analyst works for credit risk officers who work directly with the client and the corporate bankers. If the role is for a credit analyst position in commercial banking this can be a good role, though you probably won't stay in this capacity; the exit opportunities are typically limited to you either becoming a commercial banker or moving to corporate banking for credit risk. Corporate banking credit analysts have the exit opps mentioned above, but there is no up or out requirement here like there is in IBD. Analysts from credit risk at the BB I work at have left to go to IBD at the same bank, PWM at Goldman, energy analyst at a power company, commercial banker at middle market banks (corporate banker ropenings are rare at BB's since they stay in their positions until retirement usually), corporate finance at a oil and gas company, real estate analyst at Hillwood, etc.
I've recently accepted an internship as a credit analyst. They have me at 23/hr. What can I expect the full time offer to look like provided I earn it
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