JPMorgan IB Risk Bonuses

mrvau's picture
Rank: Baboon | 164

I recently accepted an offer to join an IB Credit Risk team at JPMorgan.

I wanted to know if anyone is currently in this program. Any idea about how are ANALYST BONUSES compared to being in other teams in the IBD (such as M&A, Leveraged Finance, etc)??? What about exit opportunities? What about staying in an IB as an Associate?

Comments (84)

Oct 24, 2009

very interested as well!

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Oct 24, 2009

Not sure at JPM, but I have a friend at Barclays working as a credit risk analyst. I wouldn't categorize him as a member of IBD, more just a function of their Capital Markets division. I'm unfamiliar with someone working credit risk in IBD. Anyways, he got like 60-65k his first year and his bonus was like 5-7% of his salary.

Hope this is helpful, although we may not be talking about the exact same position. If you are not in an industry group, M&A team, etc I wouldn't expect IBD level bonuses.

Oct 24, 2009

According to JPM's career website (http://careers.jpmorgan.com/student/jpmorgan/caree...), even the training program is the same as for all other Investment Banking analysts:

"The Global Investment Banking program gives Analysts who will be working in investment banking, debt or equity origination, corporate banking, equity research or credit risk the technical skills they need to succeed."

"Training is interdisciplinary, and you will learn about the firm's strategy and culture, as well as about the broader Investment Bank. Specific segments of the program focus on core skills such as financial modeling, valuation analytics, accounting, corporate finance, economics, equity capital markets, debt capital markets and risk analysis. You'll also be trained on topics that cover financial instruments and real-world applications of theoretical concepts."

So what do you think... is this front office or middle office? And, more importantly, HOW ARE BONUSES COMPARED TO IBD ANALYSTS? (the salary, by the way, is just the same)

Oct 24, 2009

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Oct 25, 2009

I know JPM is different in that the credit guys work with the deal team, but it's technically middle office. The work credit analysts do are not for the client, but for internal purposes.

I'm unsure what the numbers are for credit analysts, but I expect it will be at a significant discount to IBD. My guess would be somewhere in the range of 10k.

Keep in mind that your hours will be significantly better than IBD though. Salaries across all the divisions FO/MO/BO are more or less the same.

You won't have be recruited by headhunters like M&A and Lev Fin, but there will still be opportunity for you to move up within the firm.

Oct 25, 2009

By "there will still be opportunity for you to move up within the firm" do you mean that it could be possible to move up to associate in M&A or Leveraged Finance team without an MBA in between?

Oct 25, 2009
Hybrid:

Keep in mind that your hours will be significantly better than IBD though.

I had a friend who worked in the CRM division of JP this summer, and she ended up working till about 1 every night...

Oct 25, 2009

It's unlikely you'll be able to on the associate level, but after a year or two its possible to switch over to ibd as a 2nd year or 3rd year analyst.

You'll have to network pretty hard, have great reviews, and make sure you know your technicals.

It would be far easier for you to move up in other MO roles or within Risk

Oct 25, 2009

martinrvau - what was the approx base they gave you? 65 base + 10k sign on?

Oct 25, 2009

Compensation is the same as for IBD analysts

Oct 25, 2009

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Oct 25, 2009

i heard that crm/ib risk is over at 270 park whereas pure IBD is elsewhere (I think the old Bear building). did you ask where you would be placed?

Oct 25, 2009

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Oct 25, 2009

Relative to IBD. If she's there until one, the IBD deal teams she was working with were likely there until later. There was something very wrong if she was staying the same time/later than the bankers on the deal.

I had a friend who worked at GS credit risk and had his work done everyday by 8pm. However there was an expectation of facetime, so he ended up leaving around 10. So I guess it can depend on culture as well.

You will have worse hours relative to the general population, but your work isn't client driven and therefore won't be demanded the next day. It will be driven by your manager and the expected duration of the deal. You also don't work weekends.

There will be instances when the credit guys will get on deals that come out of nowhere and have to work crazy hours (i.e. BofA ML Merger), but those are rare.

Oct 26, 2009

So, going back to bonuses in JPM Investment Banking Risk, does anyone else have any guesses?

Oct 26, 2009

5-10k

Oct 26, 2009

Do you know it or is it just a guess?

Oct 26, 2009

I actually have a friend who is an analyst at JPMorgan IB Credit Risk and he got about $35,000--

Oct 26, 2009

1st year i am guessing? and after tax or pre tax? thanks

Oct 26, 2009

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Oct 26, 2009
slik vik:

1st year i am guessing? and after tax or pre tax? thanks

Pre tax, 2009

Oct 26, 2009

I interviewed with this group a number of years back. All the guys I met with came over from the levfin group. Of course they were trying to sell me on joining, but their pitch was hours are a little bit better than IB, and all-in comp is at about a 10k discount. Of course, this was at the peak of the levfin bubble when the bank was ranking in fees on their levfin advisory/portfolio.

While I'd imagine the portfolio management aspect of the job is pretty interesting right now, it is not exactly a banking skill set (although probably pretty transferable to a distressed debt shop).

Oct 27, 2009
yuntsucks:

I interviewed with this group a number of years back. All the guys I met with came over from the levfin group. Of course they were trying to sell me on joining, but their pitch was hours are a little bit better than IB, and all-in comp is at about a 10k discount. Of course, this was at the peak of the levfin bubble when the bank was ranking in fees on their levfin advisory/portfolio.

While I'd imagine the portfolio management aspect of the job is pretty interesting right now, it is not exactly a banking skill set (although probably pretty transferable to a distressed debt shop).

Hey Yuntsucks! Do you mean that if the top bucket of IBD analysts got a 50k bonus, the top bucket of IB-Risk analysts would get about 40k???

Oct 27, 2009

I highly doubt its 35k. julns86 made his account two days ago and is speaking through the grapevine.

Oct 27, 2009

That was what they told me, once again, this is second hand information from someone trying to sell me on joining.

Oct 27, 2009

I'm pretty sure that 2nd year analyst top bucket bonuses at BB was 60k.

Oct 27, 2009
Peter_Troob:

I'm pretty sure that 2nd year analyst top bucket bonuses at BB was 60k.

Is that figure for 2009? If this is true then it's pretty good, given that 2009 bonuses were considerably low compared to other years.

Oct 27, 2009

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Oct 27, 2009

I'm pretty sure. It was from an old post about 2008 Comps.

Oct 28, 2009

I read in another forum that in JPMorgan the IB Credit Risk team is actually considered FRONT OFFICE. Does anyone have any information/comments/insights on this? Do you think this would imply that they also get close-to-front office bonuses?

Oct 28, 2009

nartinvau check your inbox

Oct 29, 2009

I read in another forum that in JPMorgan the IB Credit Risk team is actually considered FRONT OFFICE. Does anyone have any information/comments/insights on this? Do you think this would imply that they also get close-to-front office bonuses?

Nov 10, 2009

They are middle office for sure. I have a friend in there at JPM.

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Nov 1, 2009

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Nov 1, 2009

i'm pretty sure they are middle office. i know their bonuses are less.

Nov 1, 2009

God, nothing seems to change on this forum. Haven't visited here in a while but same old same old. People spouting out information they have actually no knowledge about. Please people, if you don't know what you are talking about please listen and try to learn something. Credit and how it is compensated is treated differently in every firm. Even within JPM there is a credit team in the commercial bank and a credit team in the investment bank
That said, people who work in credit risk management in the IB at the ANALYST level are paid the same as analysts in the IB. That means this past year an "E" (that means someone who is ranked in the top 20% bucket) in credit risk management will be paid the same as an E in M&A. Now, MDs in M&A will get paid more on average than MDs in credit, but most people here aren't going to make MD.

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Nov 4, 2009
whatlife208:

God, nothing seems to change on this forum. Haven't visited here in a while but same old same old. People spouting out information they have actually no knowledge about. Please people, if you don't know what you are talking about please listen and try to learn something. Credit and how it is compensated is treated differently in every firm. Even within JPM there is a credit team in the commercial bank and a credit team in the investment bank
That said, people who work in credit risk management in the IB at the ANALYST level are paid the same as analysts in the IB. That means this past year an "E" (that means someone who is ranked in the top 20% bucket) in credit risk management will be paid the same as an E in M&A. Now, MDs in M&A will get paid more on average than MDs in credit, but most people here aren't going to make MD.

WHATLIFE208: Great answer. So you mean that bonuses are the same at the analyst and associate level, start to be a little different at the VP level (when people are expected to start bringing business), and are different at the ED/MD level. How do you know this for certain? Do you work there?

What about exit opportunities and transfers to the 'regular' IBD? How are exit opportunities compared to an M&A analyst?

Nov 3, 2009

Agreed with whatlife on the lack of good information out there.

the IB risk positions are FRONT OFFICE - there are middle office positions, but those aren't it.

One litmus test (although not 100% accurate) is whether you face clients or not. I've worked at more than one bank, and have seen credit develop relationships with clients and I've been with clients with credit there on due diligence.

The clients know that no matter what a banker/salesperson promises, the credit person is the person ultimately responsible for capacity - and pricing to a certain extent.

The more important test - is how you get paid. You get paid at a "front office rate" - higher than custody "front office", but at the senior levels typically less than the M&A Bankers

Upward mobility within credit is typically easier on the M&A side, so I would factor that in. Hours are typically less as well. The person that scored the highest in my training class was on the credit side.

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Nov 4, 2009

After reading the last few comments, I decided to do some research ad contact some alumni... it seems you're right, it is a front office role and bonuses are just as good as for all IBD analysts. Woo hoo!

Nov 8, 2009

I worked in the exact position you are describing for one of the big universal banks. With regard to bonuses, it varies significantly by bank. I know that back in 2005, first year bonuses for risk groups at one firm (I think Citi) were up to 50k for risk guys. I also had friends at BofA in the same position...their bonus was 20-23k.

Exit ops can be decent, but you really have to network your ass off. if you are going to bounce to IBD, make sure you do it as soon as an opportunity opens up. A problem that you might run into is that credit groups might hold you to a 2 year commitment (even if you never sign anything saying such). We had a guy in a credit group who wanted to transfer internally into an IBD group, and they actually held him back in the credit group for six months until his two years was up. Complete B.S.

As far as moving over to IB after reaching associate, you can basically forget about it. Credit groups (at least at my bank) tend to throw around associate promotions much easier than in IB. The only way to make the move to IB after reaching associate will be to go back to B-School.

Nov 9, 2009
outsidebanker:

I worked in the exact position you are describing for one of the big universal banks. With regard to bonuses, it varies significantly by bank. I know that back in 2005, first year bonuses for risk groups at one firm (I think Citi) were up to 50k for risk guys. I also had friends at BofA in the same position...their bonus was 20-23k.

Exit ops can be decent, but you really have to network your ass off. if you are going to bounce to IBD, make sure you do it as soon as an opportunity opens up. A problem that you might run into is that credit groups might hold you to a 2 year commitment (even if you never sign anything saying such). We had a guy in a credit group who wanted to transfer internally into an IBD group, and they actually held him back in the credit group for six months until his two years was up. Complete B.S.

As far as moving over to IB after reaching associate, you can basically forget about it. Credit groups (at least at my bank) tend to throw around associate promotions much easier than in IB. The only way to make the move to IB after reaching associate will be to go back to B-School.

Hey OutsideBanker:

A couple of questions:

1) Were IB Credit Risk bonuses for analysts the same as for other IBD analysts? (i.e., did top bucket analysts in M&A and other IBD receive the same bonus as top bucket analysts in IB Risk?)

2) How did you approach your MD/supervisor about making the move? How did he/she react?

Thanks!

Nov 9, 2009

Outsidebanker, I also have a couple questions:

1) When you say exit opps are decent, what type of exit opps are you talking about? What did risk folks typically do after their two year stints?
2) How did they go about getting these opportunities and when did they start looking? 6 months in? 1 year in?

Thanks!

Nov 10, 2009

It's not real IBD, I think MO.

Nov 11, 2009
Nov 11, 2009

I thought we had already established that this was FRONT OFFICE. Not the traditional M&A team, but it is still FRONT OFFICE. The only doubt right now is concerning BONUSES and EXIT OPPORTUNITIES.

I've asked RELIABLE people (i.e., alumni and people working in the industry) and they've told me that bonuses are just the SAME as for the rest of the IBD. On the other hand exit opportunities might be a little different: you can definitely still move to PE and M&A teams but often people will stay in their IB Credit Risk teams.

The funny thing is that the not-so-reliable people (i.e., not-very-well informed wanna-be-bankers/strangers like most people here in these forums) say just the opposite... that it is middle office, etcetera

Nov 11, 2009

can we end this debate? what part of risk management is FO and what part is MO? If you're going to meet counterparties, you must be FO right? Do you get an FO bonus? What if it's not IB risk but say financials risk? Does it vary across banks?

Nov 11, 2009

Won't there be a CONFLICT OF INTEREST between producing revenue/fee and managing risk if the Risk team is FO? I'm just saying a dedicated risk management team should not have FO revenue-producing responsibilities; not commenting whether pay is less. And the reason Risk is MO rather than BO is because they interact with clients/counterparties.

Nov 12, 2009

From the career website

"Focusing on clients:

While my role as a Credit Risk Manager is client-facing, we are less involved with pitching products the bank offers, and instead focus more on the use, and protection, of J.P. Morgan's balance sheet. When committing to a financing, we ultimately will be providing our own capital, even if much of the deal is syndicated out to other lenders. As such, it is my responsibility to ensure that we are comfortable lending the right amount, for the right duration, and to the right clients."

http://eurocareers.jpmorgan.com/cm/ContentServer?p...
Any thoughts?

Nov 12, 2009
martinrvau:

From the career website

"Focusing on clients:

While my role as a Credit Risk Manager is client-facing, we are less involved with pitching products the bank offers, and instead focus more on the use, and protection, of J.P. Morgan's balance sheet. When committing to a financing, we ultimately will be providing our own capital, even if much of the deal is syndicated out to other lenders. As such, it is my responsibility to ensure that we are comfortable lending the right amount, for the right duration, and to the right clients."

http://eurocareers.jpmorgan.com/cm/ContentServer?p...
Any thoughts?

This is pretty standard risk management practice among banks. Again, RM is usually not considered FO because of no direct revenue-producing responsibilities. That being said, I believe Lloyd Blankfein mentioned in a speech somewhere that risk manager ought to be incentivized better (e.g. pay on par with FO), so who know, maybe there's a bright future in RM.

Nov 12, 2009

^They say a lot of that stuff, Lloyd Blankfein even tells the back office that they get to call the shots (no joke).

Either way, I had a friend do MM/boutique IBD over JPM IB risk, take that for what you will

Nov 16, 2009

Another quote from the career website:

"My role on the deal team includes the credit analysis and due diligence of the client and industry, as well as building a model which projects the Company's future cash flows to ensure that the Company will be able to pay off its debt. I support and work with the bankers and credit executives so that they have all the necessary information to give credit approval.

But my role doesn't end with that transaction. Once the loan is complete, my team and I maintain the relationship with the client and monitor the Company's performance. Also, CRM is often approached by other groups in the firm for our client and industry expertise as we are the ones who foster and build-on the relationship with the client."

With the exception of "pitching", which is not mentioned in the aforementioned quote, what is really the difference between the job of an IB Credit Risk analyst and, let's say, the job of an M&A analyst. I think it doesn't really sound very different. Why, then, should pay be very different? Don't you think this is another point that supports that year end bonuses are just the same as for all other IBD analysts?

Nov 17, 2009
martinrvau:

Another quote from the career website:

"My role on the deal team includes the credit analysis and due diligence of the client and industry, as well as building a model which projects the Company's future cash flows to ensure that the Company will be able to pay off its debt. I support and work with the bankers and credit executives so that they have all the necessary information to give credit approval.

But my role doesn't end with that transaction. Once the loan is complete, my team and I maintain the relationship with the client and monitor the Company's performance. Also, CRM is often approached by other groups in the firm for our client and industry expertise as we are the ones who foster and build-on the relationship with the client."

With the exception of "pitching", which is not mentioned in the aforementioned quote, what is really the difference between the job of an IB Credit Risk analyst and, let's say, the job of an M&A analyst. I think it doesn't really sound very different. Why, then, should pay be very different? Don't you think this is another point that supports that year end bonuses are just the same as for all other IBD analysts?

Let me explain this job description for you:

The banker (M&A or Industry Group) pitches a deal (let's say to buy out a competitor) and the client accepts the proposal. The banker works on structuring the deal and maybe gets the DCM desk involved because the client wants to use debt (along with additional financing through the bank) to go through with the buyout. DCM starts working on the debt offering while M&A is working on the transaction, in the mean time they will have to go through risk management (you) to get approval for the debt offering and additional financing (kind of like research has to go through compliance to issue a report). You have veto power if you think that it is too risky and the bank will not be able to recoup some of its financing that it will provide to the client. That's where you might build your own (risk) model to see whether the risk is worth the return.

After the deal is completed you will continue servicing the client, i.e. make sure that he pays you back and makes good on the debt, while the bankers are working on another deal and don't care what happens to that client.

Ok, maybe I dumbed it down a little bit and what I said is a little simplistic, but you should stop worrying about what your bonus will be and focus on whether you really want to do this type of work. And don't get too caught up in the FO/MO/BO crap either, it is just a label. Just because you talk to clients doesn't necessarily mean you are FO. You are risk management, you are there to make sure that the bankers don't go wild and give their clients great deals where they earn $20mn in fees, get their big bonuses and the next year the bank loses $100mn because the client defaulted. I know a bank that classified research as BO for the longest time and then a few years back decided to reclassify it as FO. Did their job change? Did they get new responsibilities? Were their bonuses any higher? The answer to all those questions is no.

That said it is still a good job to have (just like any other job at a bank), but if you don't like what you are doing then you will not succeed no matter how much they pay you.

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Nov 17, 2009
stk123:
martinrvau:

Another quote from the career website:

"My role on the deal team includes the credit analysis and due diligence of the client and industry, as well as building a model which projects the Company's future cash flows to ensure that the Company will be able to pay off its debt. I support and work with the bankers and credit executives so that they have all the necessary information to give credit approval.

But my role doesn't end with that transaction. Once the loan is complete, my team and I maintain the relationship with the client and monitor the Company's performance. Also, CRM is often approached by other groups in the firm for our client and industry expertise as we are the ones who foster and build-on the relationship with the client."

With the exception of "pitching", which is not mentioned in the aforementioned quote, what is really the difference between the job of an IB Credit Risk analyst and, let's say, the job of an M&A analyst. I think it doesn't really sound very different. Why, then, should pay be very different? Don't you think this is another point that supports that year end bonuses are just the same as for all other IBD analysts?

Let me explain this job description for you:

The banker (M&A or Industry Group) pitches a deal (let's say to buy out a competitor) and the client accepts the proposal. The banker works on structuring the deal and maybe gets the DCM desk involved because the client wants to use debt (along with additional financing through the bank) to go through with the buyout. DCM starts working on the debt offering while M&A is working on the transaction, in the mean time they will have to go through risk management (you) to get approval for the debt offering and additional financing (kind of like research has to go through compliance to issue a report). You have veto power if you think that it is too risky and the bank will not be able to recoup some of its financing that it will provide to the client. That's where you might build your own (risk) model to see whether the risk is worth the return.

After the deal is completed you will continue servicing the client, i.e. make sure that he pays you back and makes good on the debt, while the bankers are working on another deal and don't care what happens to that client.

Ok, maybe I dumbed it down a little bit and what I said is a little simplistic, but you should stop worrying about what your bonus will be and focus on whether you really want to do this type of work. And don't get too caught up in the FO/MO/BO crap either, it is just a label. Just because you talk to clients doesn't necessarily mean you are FO. You are risk management, you are there to make sure that the bankers don't go wild and give their clients great deals where they earn $20mn in fees, get their big bonuses and the next year the bank loses $100mn because the client defaulted. I know a bank that classified research as BO for the longest time and then a few years back decided to reclassify it as FO. Did their job change? Did they get new responsibilities? Were their bonuses any higher? The answer to all those questions is no.

That said it is still a good job to have (just like any other job at a bank), but if you don't like what you are doing then you will not succeed no matter how much they pay you.

I think you're actually wrong about the role of DCM--and, if anyone knows, please correct me.

What DCM does is to UNDERWRITE BONDS and SYNDICATE LOANS (i.e., debt outside the bank). The "additional financing" you mentioned (i.e., debt inside the bank) is not a role of DCM. That's one of the things the IB Credit Risk team is in charge of. They are the team who uses the bank's balance sheet in order to make a transaction possible.

With that said, not only should IB Credit Risk be 'labeled' as front office, but also as a revenue generating team. This, hopefully, supports the hypothesis that analyst bonuses for the team are just as good as for the rest of IBD analysts.

Nov 16, 2009

Don't know much about JPM Risk, but a friend of mine did a similar thing at Lehman a few years back, and she absolutely hated it. She said it was a MO support role masquerading in the front-office. Is your job within IBD, or is it a separate division entirely? I'd be more suspicious if it's a separate division.

Nov 16, 2009
ews09:

Don't know much about JPM Risk, but a friend of mine did a similar thing at Lehman a few years back, and she absolutely hated it. She said it was a MO support role masquerading in the front-office. Is your job within IBD, or is it a separate division entirely? I'd be more suspicious if it's a separate division.

We all know no one at Lehman paid attention to their Risk dept :)

Nov 16, 2009
ews09:

Don't know much about JPM Risk, but a friend of mine did a similar thing at Lehman a few years back, and she absolutely hated it. She said it was a MO support role masquerading in the front-office. Is your job within IBD, or is it a separate division entirely? I'd be more suspicious if it's a separate division.

Yes, it is within the IBD and the training program and base salary are actually the exact same as for the rest of IBD analysts.

Nov 16, 2009

Of course the base salary will be the same. All analysts, even BO people, get similar bases. It's the bonuses that truly differentiate the roles. In any event, if Risk is an actual IBD product group at JPM, I wouldn't be too worried about it. I just know that at some other firms, it's a glorified MO support position.

Nov 17, 2009

you should submit this hypothesis to the CEO. if you can prove to him without a shadow of a doubt that evidence supports your hypothesis, I am sure he will up the bonus.

Nov 17, 2009

...

Nov 17, 2009

It seems like IBD is the first contact and then credit risk. It seems like a hybrid support role. My friend is in operations and he talks to client's a lot, though they are from back offices at other banks so that probably doesn't count lol.

Jan 12, 2010

bump, would like more info on this since there are so many contradicting posts

Jan 12, 2010

I would like more info too. Though I do understand there is no industry or product group called "credit risk" so perhaps that is why its not considered a traditional IBD?

Jan 12, 2010

Agreed that there are many contradicting statements. As you spend more time on the site, you can learn which posts are conjecture and which are facts. The star beside certain uses (certified users) are generally more reliable. Don't be surprised if those supplying false facts start complaining about the lack of offers in a few weeks - there are a few people on these boards from each of the bulge bracket banks and from all the resume help posts, we can easily match up applicants and ding them.

To get back on track to the original questions:
1) Bonus #?s - that's anyone's guess. At the junior level they're typically in-line, the 35k mark seems plausible for a 2009 number. I've seen IBD numbers at a much higher level for top buckets and at a much lower level for bottom bucket analysts. Keep in mind, buckets vary and some groups are more selective. You have a better shot at making top bucket if you're in a group that suits you. Remember, junior pay and senior pay are very different, and you should be thinking about a career path not simply how much can I make right now.

2) Exit Ops/Upward mobility. Both sides are going to have different exit ops - but keep in mind that exit ops now aren't the same as the exit ops in 06/early 07. Just compare the IBD exit op stats of the class of 07 and 04 - very different. I have no clue what IBD exit ops will be for the class of '10. Anecdotally going from analyst to associate is typically more popular on the credit side vs. the coverage side. This could be due to lack of opportunities or lack of desire on the coverage side (it's a chicken and egg dilemma)

The less relevant FO/MO debate:
1) These distinctions are really only relevant on the S&T side. I've never heard of an IBD MO/BO. There are support staff, but not in the way an Equity Trading desk will have an MO and BO. From a very perverse point of view, IBD analysts are really the IBD MO - they do all the support work (model building, pitchbooks) to make their deals possible and don't get much client exposure (compared with VP to MD level positions)

2) It appears that JPM Credit Risk Management has an FO and an MO. Do a search for jobs on the experienced applicants section of the JPM website. I would imagine that most banks would view their exposure to clients across all products (including loans and S&T activity) and you would likely need an MO to manage the S&T side of things. If the FO/MO distinction is critical, doesn't having a separate group supporting you with the MO title solve that issue?

Jan 13, 2010

Citi has a similar group. It used to fall under Corporate Banking (Corporate Banking at Citi is divided into two sub-divisions: Business and Credit Risk). When Citi merged its Corporate Banking with Investment Banking earlier last year, the Business sub-division combined with Investment Banking, but the Credit Risk sub-division combined with Risk Mgmt. Technically, it is still a FO team. However, ppl are pretty pissed because they no longer fall under a banking division.

As far as I know, the major function of this group at Citi is to assess risk exposure in corporate loan transactions, whether it is investment grade, or leveraged loan or a bridge loan in a M&A deal. Not sure if it carries a similar function at JPM.

Jan 13, 2010

Ukon is right, I think it is IB in a sense, but you are doing different types of work. So referring back to the original question regarding JPM, it's kind of like Citi where it was a separate division before doing risk analysis for the transactions.

Jan 13, 2010

All this guessing is funny .... GS Credit Risk 2nd year analyst makes about 30k bonus - they do work longer hours than normal ppl about 8am to 8-9pm ... but its a good way to have a decent life

Jan 13, 2010

It's true that the hours are better than in the typical IB group, but it's not an 8 am-8 pm job either. It's more like 8 am to 10-11 pm. Another difference with the typical IB group is that work is more 'constant' / 'regular'. In other words, in the typical IB group you can be doing little or even nothing in the afternoon and then suddenly get staffed on something that needs to be done that same day... on the other hand, in IB Risk you're pretty busy all the time.

So it is, up to some degree, a tradeoff: IB Risk = regularly busy all the time and fewer hours; typical IB group = not entirely busy all the time but insanely busy from time to time and more hours. So the AMOUNT of work is the same, what is different is the FLOW.

And yes, compensation (bonuses) at the analyst/associate level is THE SAME for both. First because you get pooled with the rest of the IB and second because of the 'tradeoff' I just mentioned. Compensation (=bonuses) starts being different a the SENIOR level.

Jan 13, 2010

If you are so sure about this information, why are you asking WSO?

Jan 13, 2010
FinancialTimes2009:

If you are so sure about this information, why are you asking WSO?

Because when I originally posted the question I wasn't sure. Then I did some research and now I know how things really are.

Jan 13, 2010

Seems like same as GS credit risk as above poster mentioned, not as glamorous as regular IBD. Citi risk management is considered middle office/back office.

Jan 13, 2010

I think its a pretty good spot to be in, especially given that the markets and the job front is still looking relatively bleak for recent finance grads. You'll be exposed to good corporate finance fundamentals, JPM is a great company/name, and Risk Management is bound to be a more important role going forward.

Jan 14, 2010

Something I still don't know, though, is what the typical analyst to associate yield ratio is in these kind of positions compared to the typical ratio in a more typical investment banking group. As many have said, I'm aware that it's relatively higher... but what exactly does 'higher' mean (numerically)? Any thoughts on that?

Jan 14, 2010

Why do you say that bonuses are the same when everyone else is saying the most you can hope for is 30k?

Mar 10, 2010

I have a friend at JPM credit risk, and just to clarify a few facts:
1. Bonuses are the same as IB coverage until senior positions
2. Although IB risk is not categorized as being part of IB, it is front office, in a different sense from IB coverage or product. Just as you would not characterize S&T as being part of IB, IB risk is categorized differently because it serves a different function. It works on deals, but whereas coverage focuses on the interests of the clients, risk focuses on the interests of JPM.

I wanted to ask about exit opportunities- how easy is it to get exit opps in coverage, PE, or hedge fund after this position?

Mar 23, 2010

Does anyone know how credit risk bonuses are at banks other than JPM/GS? Seems like there's an extremely wide range from 5% - 50%+.

Mar 25, 2010

mrvau,

I rarely post on these forums but am shocked and amazed at 1) how annoying your comments are and 2) how long you've managed to drag out this stupid debate. My best friend works at JPM in CRM and I can tell you, in terms of skill-set and exit opps, it is NOT comparable to IBD. Yes, you get the the 8 weeks of classes / training with the IBD 1st-years and yes, your bonus may be the same but stop bombarding this board with questions and then giving answers to re-assure yourself that you've landed this great position with all these exit opps. Of course the JPM site is going to glorify your position..that's how they attract / recruit employees into the division. So relax, realize you're in a MO position, and re-evaluate your options in a year or two.

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Best Response
Jun 4, 2010

LCRBanker, agree with your comments around MRVAU's posts which seem to just focus around glorifying his / her position.

Having been in Credit risk in Corp Invmt Banking at a universal bank for 4 years now, I agree it's not an 'FO' role ((my understanding is this role at my institution is similar to GCRM at JPM). Our main performance metrics is asset quality. Revenue / margins are still part of our year-end metrics but--hey--let's face the facts, a $100mm loan loss can easily outweigh $1mm of credit fees you may have generated on that product........

Essentially, we're there to do determine whether we are comfortable with advancing credit over the life of the facility (arising from the products that our internal business partners are pitching the client) and at what price (is the bank getting satisfactory return on an overall revenue basis, not just on the loan, and relative to the risk).

We're there to manage the portfolio when the banker rides off into the sunset to chase the next deal. We also do silly stuff like dealing with regulators and writing credit memos / transactional memos. It's our responsibility to ensure the operational teams risk exposure correctly but we don't do it ourselves.

We interact with clients, not to sell products but to negotiate contracts / loans, as admin agent for syndicated loans, DD'ing with / at the client. Note at certain banks, the bankers negotiate the contracts... that might be the case for banks that don't have a strong commercial bank foundation...

Hours are long enuff (avg. 12-14 / day) and constantly busy (even w/o transactions). We do work late nights and weekends when a transaction demands it. And we often have to take work home to do research, to review contracts, to prep memos, to participate in deal team calls, etc.

I see ourselves as being as well-educated as I-bankers with some comparable skills. We could probably do the IB work, but might not want to deal with the hrs and might not have the extroverted / sales personality that is critical at the higher levels in IB (where your responsibility to bring in business is higher). I will jokingly say that IBD's main MS tools are PPT and XLS, ours are Word and XLS.

Exit opps: As is the case with any role, the longer you stay in a dept, the more entrenched you become. I have seen lots of credit risk colleagues go into FO roles, like Corporate banking, CDS sales, FI research, IB, hedge funds as a trader...it all depends on your experience, your personality, your drive, recommendations, and--frankly--timing / luck.

Bonuses---there is no upside, only downside!! The only way you can really push your comp up significantly is by switching institutions..................

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Jun 4, 2010
CreditRiskerASSOC:

LCRBanker, agree with your comments around MRVAU's posts which seem to just focus around glorifying his / her position.

Having been in Credit risk in Corp Invmt Banking at a universal bank for 4 years now, I agree it's not an 'FO' role ((my understanding is this role at my institution is similar to GCRM at JPM). Our main performance metrics is asset quality. Revenue / margins are still part of our year-end metrics but--hey--let's face the facts, a $100mm loan loss can easily outweigh $1mm of credit fees you may have generated on that product........

Essentially, we're there to do determine whether we are comfortable with advancing credit over the life of the facility (arising from the products that our internal business partners are pitching the client) and at what price (is the bank getting satisfactory return on an overall revenue basis, not just on the loan, and relative to the risk).

We're there to manage the portfolio when the banker rides off into the sunset to chase the next deal. We also do silly stuff like dealing with regulators and writing credit memos / transactional memos. It's our responsibility to ensure the operational teams risk exposure correctly but we don't do it ourselves.

We interact with clients, not to sell products but to negotiate contracts / loans, as admin agent for syndicated loans, DD'ing with / at the client. Note at certain banks, the bankers negotiate the contracts... that might be the case for banks that don't have a strong commercial bank foundation...

Hours are long enuff (avg. 12-14 / day) and constantly busy (even w/o transactions). We do work late nights and weekends when a transaction demands it. And we often have to take work home to do research, to review contracts, to prep memos, to participate in deal team calls, etc.

I see ourselves as being as well-educated as I-bankers with some comparable skills. We could probably do the IB work, but might not want to deal with the hrs and might not have the extroverted / sales personality that is critical at the higher levels in IB (where your responsibility to bring in business is higher). I will jokingly say that IBD's main MS tools are PPT and XLS, ours are Word and XLS.

Exit opps: As is the case with any role, the longer you stay in a dept, the more entrenched you become. I have seen lots of credit risk colleagues go into FO roles, like Corporate banking, CDS sales, FI research, IB, hedge funds as a trader...it all depends on your experience, your personality, your drive, recommendations, and--frankly--timing / luck.

Bonuses---there is no upside, only downside!! The only way you can really push your comp up significantly is by switching institutions..................

Great post!! Sent a PM with a few more questions

Mar 25, 2010

If I was looking at Risk jobs, I'd want to be in the Prime Brokerage space. Hedge Fund risk management is a fascinating job. BARC and MS have some great folks.

"The American father is never seen in London. He passes his life entirely in Wall Street and communicates with his family once a month by means of a telegram in cipher." - Oscar Wilde

Jun 4, 2010
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