What Do Corporate Bankers Do? - Corporate Banking Definition
It is the corporate banker's job to get secure financing for clients.
You're generally working with a syndicate of lenders arranging revolvers and first lien term loans for large-cap companies. (This can be for M+A deals, new capital raises, or refinancings.) It's pure credit/capital structure analysis.
As an analyst, you won't be the one engaging in securing these funds.
I'm a first year analyst in CB. I'm not sure how Citi structures their CB department, but as a first year analyst, you'd be focusing more on underwriting transactions and monitoring the debt portfolio rather than schmoozing clients. A first year analyst would have no idea how to approach a client and present a cross-sell idea.
Why Corporate Banking?
This question comes up at every interview. One thing not to do is say you want something similar to investment banking but with a better lifestyle. The two are similar but different, so it demonstrates a lack of knowledge. There are many different ways to go about answering this question. What you want to do is focus on the functions of the job.
Here are two aspects of CB you can incorporate into your answer.
- Underwriting/portfolio management aspect: Transaction-based while being unique relative to IB in that your firm is assuming the risk. You are interested in lending and actually taking a position rather than just advising companies or syndicating shares with no skin in the game
- Credit mindset: You like to focus more on reducing risk and preventing downside rather than valuing companies based on a wide variety of variables and being upside focused (as IB involves valuation work). You are interested in the wide variety of different loan financing products that are used ranging from revolvers, term loans, etc., and how businesses use them. In many corporate/commercial banks, there is a credit training program that analysts go through so you can emphasize the training, too.
- Scope for a longer term career (less turnover/ no "2 and O" culture).
- Developing an ability to understand businesses fundamentally to foster long-term relationships (not so much transaction focused as IB).
- The ability to have "skin in the game". (Typically, you'll be underwriting loans/credit, so you'll need to be responsible and accountable as it's the bank's money you're committing - maybe speaking to having more responsibility at a young age, etc.)
Ultimately, we believe in avoiding the comparisons to investment banking on this one. Keep the focus on CB, and tie it into one or two of the specific functions of the job mentioned above.
Salary and Hours in Corp Banking
There is no definite compensation range like there is for investment banking. For base pay, analysts earn around what investment banking analysts earn. The variance comes at the bonus, which depends on firm, location, and group performance. The range for analysts is $65-90k all in. Expect those numbers to increase at least 10k per year, and even more than that after a few years due to increased bonuses at the associate level.
Expect to put in 50 to 65 hours most weeks. During deal weeks, expect more.
Retail vs. Corporate Banking - What's the Difference?
Many get retail banking and CB confused. Retail banking is what you see when you stop by your local bank to make a deposit. It deals with people. CB deals with corporate clientele. Retail banking offer services including mortgages, credit, and checking. It offers services including business loans, commercial real estate, and cash management.
CB Internship Experience
CB is great as an internship. If you're looking to do pursue a career in the field, then this is exactly the internship you need.
If you're looking to do investment banking, then CB is still a good option - as long as it's before your junior year since that's when you need to secure an investment banking summer analyst position. The only internship that beats a CB internship after sophomore year is an investment banking internship, and the only realistic way you're getting that is if you're a diversity candidate or land a position at a boutique.
So how do you go about securing an internship? Most are secured through networking, but you might find some firms recruiting on campus so keep your eyes peeled.
Interview Prep for Corporate Banking
Interview prep for CB is similar to investment banking, but there are differences to study for. Here are a couple of things to know from @TNA.
I'd know credit basics, know how ABL [asset-based lending] revolvers work, try and find out the space the bank you are interviewing for operates in. Stuff like that.
I was in your shoes a while back and the IB prep was pretty useful. As IBBD mentioned, you take on a buy-side mindset. With that in mind, you should know your typical sources of repayment (refinance on a unsecured/secured basis, sale borrowing base assets, cash flow from ops, etc) and key credit risks.
Interested in Investment Banking - Breaking In
The fact of the matter is you won't improve unless you practice. To have any chance at the technical questions, you need to prepare yourself with legitimate questions. The WallStreetOasis investment banking interview course is designed by countless professionals with real world experience, tailored to help you break into investment banking by acing the technical questions.