Is Corporate Banking that much worse than IB?
About a week ago there was that post about the efficiency of professional careers market, specifically in finance. It touched on corporate banking, but from what I've heard I still think it might be underrated. The base salary is only slightly less than IB and even though the bonus is at worst one fourth the percentage of an IB bonus, the hours might more than make up for it. And it's still a career that offers advancement up to the mid-six figures. What's more, if it's what you get stuck with out of college, you have the opportunity to transition to IB pretty quickly. I read somewhere that further down the line you can use it to get Treasury roles in corporate finance or maybe private banking/PWM.
Maybe it shouldn't be compared to IB and instead to Corporate Finance or consulting. Jumping into corporate finance means slow career progression and low bonuses, but you might be working the 60 hours a week that you'd be working in Corporate Banking. Consulting offers rapid career progression, supposedly, but you will be making less and working more compared to CB until you get higher up or get an exit opp. To me, when you take the Investment Banking comparison out of the picture, Corporate Banking seems like a really good deal.
Am I missing something?
One of the biggest turn offs to me was that - to this day - not entirely sure what corporate banking does? Have a best friend who works at one of the BBs in their CB arm and sometimes when I try to talk to him about work I'm just like ....? Not sure how much modeling experience (think there was a similar thread a few days ag around modeling in CB) you actually get? For me, a career has to strike both the 1) interest side and 2) what the work is. Certainly do not think that CB checks off box 1, let alone maybe even box 2? I have a specific industry that I know I want to be in for my career so YMMV
I'd say Asset Management at an Institutional player ticks all your boxes however, I'm a few years away from consistently clearing 7figures+ now once I become a PM and can honestly say I've never worked more than 60hours in a given week
What’s your background and how long have you been in the business?
The work can be boring for sure especially at the An/Aso level, but IMO it’s one of the only jobs that you can earn $250K+ in while working 40-50 hrs a week. And it doesn’t take long to move up the ladder. You can make VP in 5-6 yrs and the highest comp will be on the sales/relationship coverage side.
I worked an average of 55-60 hours at the Analyst and Associate level, less than 50 on average at VP level so far. My comp increased significantly from Associate to VP. At Director level I’ll probably be clearing $400K, while still only working less than 50 hrs a week. $400K in my early 30’s might not be IB money but it’s solid income for me.
Every job has tradeoffs. FWIW, at my bank I modeled. Yes, most of the time IB is going to own the model but I raised my hand maybe 1/3rd of the time and I was able to run with the model if I wanted once I gained the trust of my teammates, which doesn’t take long if you’re competent. I left my Analyst/Associate years feeling good about my modeling capabilities but I’d be lying if I said it was really complex stuff.
Are you on the portfolio or relationship side currently?
Relationship coverage. I encourage everyone to try to be on the relationship side vs credit if they’re looking to maximize their income.
Some people can’t handle having sales/revenue goals but it’s honestly not too hard to hit or exceed the revenue goals especially at a BB.
What city are you in? Is this an industry/regional coverage role (pitching all banking products) or a syndicated loan team?
Wow. Congrats on having made it in life. Posts like these remind me the future is bright. Any advice for us in terms of career longevity / surviving to VP?
At my firm CB works nearly as much as IB (70+ hours), take a huge discount on IB pay, and have very limited exit ops. The work is pretty repetitive, lots of credit agreements and RCFs that no one really cares about - not that IB is sexy, but you do get a variety of work.
I think given the hours/pay/exits ratios it's just as many negative points as the other jobs you mention.
What type of bank are you at? US BB, C5?
US BB
I think you hit the nail on the head here
I was an Associate PM at an UMM bank making ~$225K all in, WFH 40/week
Started looking around and ended up taking a lower BB lev fin role over a mid BB CB role after coming to the same conclusion you did
CB at a MM bank is a great gig but at a BB, the hours can be very similar to IB. This is where the pay gap stops making sense
IMO, the sweet spot is private credit / direct lending. FWIW, the 2L / Mezz shops generally pay more than the senior shops
A lot of it depends on bank. Lowkey working at BB is worse because you are getting less pay for similar hours as IB. If you are looking for sweet spot of pay and WLB work at a MM bank. Then the 55-60 hours is legit. Comp is less than doing CB at a BB but a lot less hours. If your goal is to do CB at a BB you might as well do IB.
This is what I am currently doing and CB feels like a cheat code in these firms. Clearing 110k, bearly working over 50 hours a week. I hope kids don't figure this out and start to flood applications
Any career that doesn't have a good chance of breaking 20mm tc before you retire is a shit one
Coverage banker at a top BB. Corporate bankers work with us frequently on various different things. They generally work a lot less (sometimes they're up similar hours) and heard they're paid the same salary (smaller bonus of course). I don't think corporate banking is at all a bad profession. Better work/life balance and still fine comp. Probs the only downside is IB holds pen on all model/valuation related items so corporate bankers don't get really that much modeling. Of course the exit ops aren't the same either
Concur.
Anyone have some ranges for what comp looks like at the MD and group head levels? Big difference between the credit and RM sides?
Bump, I have been looking for this info all over
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It's a solid job - great pay to hours/stress ratio in my experience - one of the cushiest gigs on the street at a BB imo. Not saying you will get the most out of the day-to-day personally, but you can live a very nice life.
Former CB analyst here that lateraled over to IB at a BB - I'd say that while the lifestyle aspects are definitely true, the learning experience and overall exposure to transactions (at the analyst/early associate level) is really quite poor compared to what you'd get in your typical IB analyst stint.
Other banks might be different, but I'd say the majority of your time as a CB analyst is spent drafting internal credit memos and paperwork for a risk officer in middle office to read over. Nothing technically rigorous goes into these credit reviews either - the most you'd do is some ratio analysis and maybe a debt repayment waterfall analysis in terms of modeling, the rest is just qualitative BS for the most part. The purpose of these reviews and memos is to serve as a backstop if something goes wrong (i.e. the bank can say that it did all the due diligence possible on a client if the auditors come knocking). In terms of live deal exposure, you might get put on a financing for a transaction, but again the IB guys would own the model, so it's really not great if you're just coming out of university and trying to learn. The majority of your other deals are going to be revolver extensions and other bank financing facilities - since this is bank lending, these are almost always strong investment grade credits where there's no need to do any serious credit analysis either.
The real sweet spot for corporate banking is if you go in as a late associate or VP. Thats where you reap the benefits of having shorter hours and decent pay while also getting your own book of clients to manage. Best path is probably to start off in IB and move over later as the skillsets you develop at the junior levels in CB is frankly quite poor and hardly transferable.
Concur with everything here.
Concur
Was it difficult to lateral from CB to IB?
Concur. I am a 2nd year analyst in a MM Bank. Fine salary but boring.
CB is just redundant work related to RCF. When there are live deals, work is more interesting. I am thinking about moving to high yield loans since the investment grade loans are just so vanilla. As we all know, it is safe and CB bankers just come up with a safe story for the credit officers to view by using the good numbers.
Just curious, how is the lifestyle in high yield loans or leveraged loan? Any difference in hour?
IMO there's 0 reason to to corporate banking when you could just work at a direct lending fund that does more interesting work with the same hours. Instead of mindless regulatory / admin work at a large corporate bank, you actually model and think about interesting deals. Compensation scales much better as well.
2 years IB (or even 1) -> direct lending >>>> corporate banking IMO.
WLB is the biggest reason IMO. I used to do corp banking and do private credit now. Granted now im on the distressed side of things but my hours now are 60-65hrs per week vs 35-40 in corp banking.
Is Corp Banking a fairly common background for people in Private credit? I would assume the credit background helps a lot.
Interesting, I started at a fairly vanilla direct lending shop and I was on almost strict 9-7 (50 hours a week) with no weekend work. Associates were definitely on 40-45.
I spent a little time in corporate banking at a huge balance sheet BB once upon a time. In my experience, it's just lending. It's credit. You are underwriting revolvers for the most part, maybe plain vanilla term loans (and your capital markets/levfin desks are syndicating them, or you are being syndicated to), and keeping an eye on them, and amending them, renewing them, etc. It's very boring. It's the cost of doing business for larger capital markets transactions and all of the ancillary profitable stuff like treasury mgmt, FX/rate/commodity hedging, etc.
If you don't care about that, you can slog through the first 10-15 years and then start having your own book of business by the time in your mid to late 30s. Then it becomes more enjoyable if you are more so on the relationship side vs. portfolio management side. Your job is to essentially manage all your clients and drum up new business, i.e. get into existing credit facilities you're not already in, put together and structure a new facility for a new company, etc (clients meaning basically the CFO/EVP/VP finance guys and gals at public and large private companies). Lots of time on the phone, maybe a decent bit of traveling, etc. If you're good enough, and stay long enough, you can start having a pretty nice life with nice comp into your mid 40s. By the time you get to your 50s, you're established, make your own hours, and are fat and happy -- you are no where as rich as the IB/PE guys at that level, but that's ok, much less stress, much less of a time commitment, etc.
What do senior level roles on the portfolio management side look like?
They kind of are more in the weeds and in control of the credit approval process. I would say they “own” the credit memos (or whatever you want to call the packages that the team puts in front of the credit committee) for approval (approval of new loans, approval of amendments, upsizings, renewals, etc). They can bleed into relationship manager responsibilities but I think they are ultimately responsible for oversight of the credits. In my experience the relationship manager and portfolio manager worked together very closely as a team, sharing work often times, but that might have been unique to this relationship manager (great guy, selfless, worked hard, well respected and super successful, etc)
CB is pretty cosy if you know what you're doing and know the internal procedures/systems. I work 30 hours a week and still exceed expectations, working for a small locl bank though.
I'm on the client relationship side and we offer general products to local companies (current account, deposits, lending, a bit of trade finance). Credit-wise I have minimal exposure and also no fancy/exotic IB-type of deals.
Salary is also above average compared to other (more demanding) jobs.
Just be aware that KYC has become huge issue in the past few years, to the point that 60% of my job consists of getting in touch with client to request KYC documentation. Being a small local bank, we don't have a lot of resources to take in analysts for this part of the work.
Good post. And to be clear, what you’re describing is Commercial Banking not Corporate Banking. From my experience, there’s a lot of similarities between the two but a difference in the kinds of things you work on (and the sizes of companies)
True. At my place commercial & corp banking are mashed together in 1 role. We have a wide range of clients and you get bigger clients in the portfolio once you gained more experience.
But again, I'm not in a global bank, so exposure to interesting deals and clients is pretty small.
Working in corp banking and here is what I like:
- Comp: so far, being top bucket, received better bonus than the VAST majority of IB colleagues with same base. Also easier to be top bucket given less competition.
- MUCH less work hours than IB (and when I work a lot, it's because I'm on a super interesting live deal)
- Work is sometimes interesting, sometimes not (this is a job, don't forget). But even I do not do 100% of modelling, each time I want I can the lead on the modelling (except for super large acquisition financing live deals in which we are super stretched.) So I have learned how to model, and, between us, it is interesting to do it but I don't understand why this is described as THE skill. Nice to have, but repetitive and time consuming stuff with no real intellectual added value. Anyway, I also worked on boring revolvers (pulling comps and dealing with the process in IB is also boring, no?), but also on very large acq financing deals, rating advisory, sustainable financing, DCM transactions, and have a unique view on how a bank work and on how corporate finance themselves.
-Culture: besides less hours, in Corporate Banking, people are more "human". You are in smaller teams, treated better
-When you are curious, you can literally call anyone in the bank and you are legitimate to ask questions, discuss, given how broad your scope is.
It is true that in the future, there is a gap in comp with IB being paid more. But at this level, you are already pulling c.$400k per year, being in your 30's, having juniors working in your team, and pulling 40 hours per week with no stress and a great brandname to impressive whoever is not working in Finance.
I don't say that corporate banking is the best job on earth, but in some BB, it seems, to me, a very fair trade-off.
In this forum, it is ver under-rated. But that is great, it is one reason why it can remains the beautiful niche it is :)
(I'm missing the business thinking on corporate operations / strategy etc. But honnestly, in IB unless you are super specialized, you don't really get this skill. More a consultant skill).
Also true that you have to give up a little bit of prestige (but prestige is only an offset to self lack of confidence) and also on some exit ops. But I see (no offence) that a lot of people here willing to spend their life to find the job that will give them the best exit opps... for the job that will give them the best exit opps... for the best exit opps.... Guys, don't forget we will all end dying (and that we don't know when !) and life is to be lived in the present (and better with some cash, and some time to spend it :) )
Wow, you make a higher bonus than most IB folks? Don't think I've heard that before. Very interesting.
I’m a first year in CB at a BB, and I talked to some older analysts and associates about comp, and I’ve heard that bonus is in-line with most BB IB comp . Like around $50k for first years and I heard this past year second years got paid like 70-80k bonuses. But this all word of mouth from an Assc and 2nd years. Then again group has been slammed this past year. Hours wise, probably better than IB but I wouldn’t call them great by any means. 9-9 at the very minimum.
Agree with this on every single level. Don’t get why the number one skill discussed on this site is being able to knockout an lbo model in 60 min. Any average business student that understands the financial statements will be proficient at modeling after a few reps.
Cb is def a great niche gig, plenty of front office client interaction and things to learn regarding your industry coverage. You are responsible for the entire client relationship. WLB/pay ratio is solid IMO compared to IB.
Agree with some of this post but a lot of what you're saying is just flat out wrong, coming as someone who's worked in both IB and CB.
Firstly your comp figures are way off - even a bottom bucket IB analyst at my BB would make more all-in than the top analysts in corporate banking. Base is also not necessarily the same as IB - depends on the bank.
The learning aspect is also objectively inferior in corporate banking - a lot (over 50% of your time) is spent on KYC and refreshing credit docs. While I agree there is still a decent amount of process work in IB, it's nowhere near as bad. The deal exposure you mention is also surface level - at my bank there are specific teams focused on sustainable financing, DCM, etc. so the analysts in those teams are going to be taking the lead leaving the corporate banking analysts with the boring process work.
You seem to also have pulled that 'pulling c.$400k a year by your 30s' number out of your ass - not sure what position you're equating this to but no corporate banking VP is making $400k unless it's been a ridiculously good year and you're up for promotion.
It's misleading for folks who haven't been in the industry to say all this and then top it off by claiming that the job has zero stress with 40 hour weeks - the corp banking folks at my firm average ~60 hours even at the more senior levels.
I personally know a JPM corp banking VP that made $400k.
In fact, I know a JPM Corporate Client Banking VP that made $450k, and they typically make less than Corp Banking which is in the investment bank.
EDIT: Hilarious I'm getting monkey shit when I've literally seen the compensation letter. In no way am I saying it's typical for CB guys to make as much as IB. But there's so much misinformation spread about the ceiling of corporate bankers.
I’ve also worked Corpbanking and IB, and this reply is 100% accurate
What does comp look like for associates and VPs on the relationship side of cb?
My experience so far has been similar and the transactions you listed are exactly the deals I get staffed on (except sustainable financing because I'm in FIG). Haven't made it to first bonus yet so I hope I line up there too haha...never heard that CB gets paid more than IB anywhere else though.
Ive worked in corporate banking for 2 banks and have friends in CB at a couple different BBs. There is no way youre making more as a CB Vp than your IBD colleagues. That simply makes no sense given one lev fin or m&a deal will bring in more fees than 5 cb deals.
Yep, he is full of shit.
This is false.
What idiots in this forum don't realize is MANY former IB professionals fold into CB coverage roles, earning just as much as IB counterparts. JPMorgan and Morgan Stanley type banks do this. They literally source deals in some cases so of course they are making real dollars.
MD in my smaller international IB with a CB arm makes a couple million a year easily because he literally can source deals.
Lol, keep telling yourself all this. Good luck with your exit opps buddy!
Lots of good info posted here. I also want to reiterate one thing:
RAISE your hand if you want to model. At my BB, if the model is not super “complex” (like a large acquisition financing or something), the IB folks are more than happy to let one of the CB analysts work on the model. It helps you gain the experience and also takes something off of their plate so it’s a win/win for everyone, assuming you’ve proven that you aren’t going to fuck anything up. You obviously won’t be modeling on every transaction, but the opportunities will be there if you speak up.
Exit opps: I had opportunities to switch internally to DCM, and I saw many Analysts do this. This opportunity is not available to everyone so be sure to be a top Analyst in your group. Also had opportunities to go to lower MM PE (less common, but possible), direct lending, private credit, Corporate Banking at mid-sized banks, and DCM at smaller banks (like the Mizuho’s of the world).
Agreed
Some people are shocked that IB is not the end all be all of high paying financial careers. I'm <2 years in, and while my comp package isn't quite as high as my IB peers (who are likely making 180k as second-year analysts), I am MORE than happy to be making ~165k in MCOL working 40-50hrs. IB is just the "easy" path to high pay. If you look hard enough and luck out, you can make 90% of the money for 50% of the hours, even if the job isn't as "sexy".
thoughts on how corporate banking compares to project finance (learning experience, wlb, upward trajectory, exits)?
2 years in CB and 2 years in IB. I really didn’t know how good I had it in CB. The pay / WLB combo is great. Can actually enjoy your life and do things outside of work
Are you planning on sticking it out in IB? What do you think about an IB analyst that wants a better WLB to switch over to CB? Could I do it in a year?
Can anyone speak to the difficulty of lateralling from one bank's CB to BAML CB? What about from CB in general to LevFin? Trying to get those 60-70% bonuses instead of 20-30% where I'm at now.
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