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by Luis Miguel Ochoa

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Corporate Banking 101: Create Twice the


Value and Work Half the Hours?
If you're new here, please click here to get my FREE 57-page investment
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into investment banking. Thanks for visiting!

Do you want to create more value? How about work less?


You probably dont associate either one of those with investment banking, and
for good reason: banking analysts spend way too many hours on a single model
and run through over 77 revisions of a presentation and that all-important
meeting often gets postponed or canceled anyway.
But there is one group where youll get a more streamlined experience doing
real, value-added work the whole time: corporate banking.
Our interviewee today comes from a corporate banking department thats
separate from the investment banking division you already know, and hes
going to give you a corporate banking crash course.
Todays interview includes additional technical comments by Angela Choi, who
spent some time covering the credit product side of nance and the economics
research side of government policy.

While corporate banking may not inspire you to become the next Blake from
Mitch and Murray, it also gets you better hours, less stress, and solid exit
opportunities.
Heres what youll get in this crash course:
How our interviewee got into the cash ow game of corporate banking
What youll do and why you want to do it
How the products you sell in corporate banking actually work
Transferable skills compared to the traditional investment banking skill set
Exit plans once youre done giving away other peoples money
Lets get started on converting this interview into a full-time oer at your
next corporate banking interview:
From College to Cash Flow
Q: How did you get started with corporate banking?
A: I had interned before at a credit fund and wanted to get into something more
structured where I could do real work (i.e. be busy with modeling rather than
be busy with twiddling my thumbs). Its more interesting to be in a group with
deal ow than to be in a group without deal ow.
So when it came time to look at banks, I looked closely at Corporate Banking
and Leveraged Finance departments. Of course, I would have been very happy
to work on leveraged buyouts, but in a market with few LBOs and many credit
amendments [NB: changing the terms of a loan], Id much rather sharpen my
credit analysis skills.

Many analysts and associates complain about tough markets, but Ive made the
most of my experience by staying positive and counting the things that are
working out.
There are no tombstones, lucites, or closing dinners when you complete a credit
amendment, but at least youre doing something at work besides following the
markets.
Q: Wow not even steak dinners? Lets continue anyway so you came from
a credit fund, what about everyone else in your group?
A: My group has a couple of more senior sta members who came in from the
various credit rating agencies.
Every now and then, someone with an M&A background comes in to interview
with my group. But really, my group is after someone who is well-versed in
credit analysis.
Once youve done it enough, people will respect you for it. Yes the skill set
from M&A is sort of/kind of/maybe transferable, but someone from a
competing corporate banking department will get the preference any day of the
week.
There is denitely less turnover compared to other departments most people
stay for a while or they leave for a couple of years and come back.
My department prefers people with abackground in Leveraged Finance since
many of our deals originate from there. MBAs are also favored in the recruiting
process, as they seem teachable, approachable, and most importantly of all
personable.

In my department, hardly anyone came from M&A, though some had prior
experience working in various divisions within xed income.
Q: And now the $745 million dollar question weve all been waiting for with
5 years of maturity and L+230 bps interest What is corporate banking?
A: Corporate banking provides nancing to corporations and institutional
clients through debt issuances, structured products, or other banking and
investment products. These products include:
Secured Term Loans
Syndicated Loans with Multiple Arrangers
Structured Finance-type Loans
Some banks operate corporate banking separately from investment banking,
while others have the two functions under the same name.
Q: So it sounds quite similar to Debt Capital Markets or Leveraged Finance if I
understand this correctly in other words, a nancing oriented or capital
markets-type role.
What does a corporate banker actually do?
A: Actually, thats not quite true. Heres how these roles are dierent:
Equity Capital Markets: Youre focused onorigination, in other words selling
new stock issuances to investors.
Debt Capital Markets: Youre also focused onorigination, in this case selling
investment-grade bond issues to investors.

Leveraged Finance: Same thing, but now youre more focused on high-yield
bond issues and building LBO models.
Corporate Banking: Youre focused squarely on theterms of the loans
themselves and your role diers depending on whether or not your bank is
an arranger, a participant, an administrative agent, a lender, and so on.
Before we continue, lets make sure were on the same page with respect to

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roles:

Lead Arranger: Similar to a book runner in equity and debt oerings, this
role entails handling a larger portion of a capital raise.
Agent: Similar to a co-manager in equity and debt oerings, this role entails
handling a much smaller portion of a capital raise.
Administrator: Monitors interest payments and debt principal balance.

Any bank staed on a corporate banking mandate will aim for a lead arranger
role, or will aim to have the most responsibility on the assignment (doesnt this
sound familiar to how employee stang works?).
Typically, the more responsibility a bank receives from the client, the greater
the fees the bank will receive. Beyond that, who gets what percentage of the
transaction, or the economics of the deal, is contingent upon the relationship
itself.
Often, the corporate banking team works with the coverage team who will, in
turn, speak with the clients, and a capital markets team who will syndicate the
loans in the market.
In that case, the corporate banker negotiates commitment papers and
structures the terms of the loan.

Q: So how would a deal work and what would corporate bankers do?
A: In a loan origination assignment, the corporate banker maintains
relationships with their corporate clients. As bankers seek to win repeat
business within their coverage areas, great measures are taken to grow and
enhance existing relationships.
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From a business perspective, this means creating a strong understanding with

new subsidiaries that clients may acquire, and on a personal level, this means

building rapport through market updates and discussions on potential

acquisition targets.

From there, corporate bankers negotiate the terms of the loan, draft the term

sheet and credit memo, and see the process through to funding.

Depending on the bank, a risk management or portfolio management group


can be responsible for reviewing credit ratings and analyzing the
creditworthiness of companies. In such a setup, a team will be tasked with
assembling credit memos and managing the modeling aspect.
In addition, the same group is tasked with marking to market securities and
hedging the decisions of a corporate banking department. In this case, your role
as a corporate banking professional would be to focus on origination.
Essentially, origination is just marketing a term referring to how the team
tries to bring in deals.
Just as capital markets assignments involve many banks, syndicated loans are a
large portion of our business. Any syndicate develops in order to spread the risk
among several parties, and to prevent the burden of nancing the mandate fall
upon just one party.

Here are the most common deal types in the corporate banking department:
Term Loans: You lend a xed amount of money that requires annual
principal repayments.
Bridge Loans: Quick nancing until a more permanent funding source can be
originated. In some cases, a nancial sponsor might use this resource after a
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bond oering is launched and before the proceeds are raised.


Revolvers: Client pays a commitment fee for access to a credit line that can

be drawn from as needed; often used to meet short-term borrowing needs if

expenses or mandatory debt repayments are higher than usual. Sort of like a
credit card for a company.

Letters of Credit: A written agreement in which the bank backs payment in


case the borrowing company defaults.
Facilities Asset-Based Loans (ABLs): Use inventories or receivables to
ensure payment is made; see the previous coverage of Structured Finance on
this site.

The Art of the Loan


Q: Lets talk about money how much do you get paid on these deals?
A: Depending on the type of transaction, deal fees range from 1.5 2.5% of the
face value of the loan. The upfront fee and annual fees are smaller than the
underwriting fees. The size of a deal can range from the tens of millions to over
a billion dollars.
The fees are very low compared to other investment banking oerings because
the loans act as a way to stay in touch with the client. The pricing also
depends on:

Sector: Some sectors are simply more speculative than others use your
imagination.
Funded or Unfunded: This refers to how much of the loan the client will
actually use. For example, Revolvers are often issued with the expectation
that the client will only draw on a certain amount (often less than 10%), and
the fees may be based on that. The bank itself will pay investors a portion of
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the syndicate loan or the Revolver to make sure the interest expense is
covered. So, bottom-line: many types of credit lines are not fully funded.
This treatment does not apply to Term Loans, however, since theyre always

fully funded.

Secured or Unsecured: Whether or not the debt is backed by the borrowers

collateral. Usually, rms support debt through via revenue generation


(structured nance-type loans) or with assets (normal collateral).

Q: Sector groups consider key drivers, such as government policy for clean
technology, or consumer preferences for consumer retail.
What moves the market for corporate banking products?
A: The London Interbank Rate (LIBOR) sets the baseline for interest expenses in
my area. As you probably guessed, basis points (1bps = .0001 = 0.01%) are added
for the risk of the company, sector, and geography.
And yes, even after the scandal(s), lenders and borrowers still use LIBOR almost
universally mostly due to tradition and the lack of a stronger standard.
The situation is quite analogous to the credit rating agencies mistakes on
collateralized debt obligations (CDOs). Unless they really messed things up,
their operations will continue to be open for business.

Theres some circularity in assessing how this market works. Supply is


dictated by, of course, the health of the nance sector, which corresponds to
the ability of borrowers to repay their borrowings.
A good example of this concept is the bankruptcy of CIT Group (FKA:
Commercial Investment Trust). Upon the initial announcement, investors
became concerned about the availability of loans for mid-cap industrial rms.
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If mid-cap industrial rms dont have loans to pay for capital equipment

purchases, production falls, layos occur, and the ability to generate cash ow

to repay debt weakens.

So its sort of a giant loop in this industry, where investors appetite for debt

depends on companies ability to repay debt which in turn depends on

investors appetite for debt in the rst place.

If you are running Excel for this situation, please make sure to turn on manual
calculation and iterations!
Q: Who are your clients? Or more broadly speaking, what types of companies
want corporate banking products?
A: It depends greatly on the year, what the market is doing, and how various
sectors are performing.
But generally, capital-intensive sectors tend to see more deals (because they
need to borrow to fund operations, and since they also have more collateral to
pledge).
In terms of completed number of deals, expect to see consumer, industrials and
communications as areas of demand when it comes to stang assignments.
Analytically Speaking

Q: Do you have any materials on the technical side of corporate banking to


share with our readers?
A: The individual borrowers have to develop materials for anyone interested in
contributing to the capital raise.
Here are a few example presentations to dierent audiences:
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Debt-Oriented Investors: [Revolving] Credit Facility: by Smurt-Stone


Container Corp.

Lenders: Lender Presentation: by WireCo World Group


Rating Agencies: Rating Agency Presentation: by San Francisco International
Airport

You will have a hand in developing these materials, and sometimes its a big
hand if you are the lead left arranger investment bank; other times youll just
accept a bag of money and call yourself a right book runner (laughs).
As a corporate banking professional, however, youll have much more
responsibility in developing the Condential Information Memorandum (CIM)
or bank book.
Any CIM describes the transaction, the company (history, situation overview
with key clients, nancials), and the sector itself. Here are some examples for
you (notice the absence of projections and the presence of a pro-forma
capitalization structure in each one of these):
Healthcare:
Sunrise Medical: by Deutsche Bank

Financials:
Pivdennyi Bank: by LBB, LandesBank Berlin, Standard Bank, and VTB
Walter Investment Mgmt: by Credit Suisse, RBS, Bank of America Merrill
Lynch, and Morgan Stanley
Consumer:

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Reynolds American: by Lehman Brothers, JPMorgan, and Citi

Media:

Tribune: by JPMorgan, Merrill Lynch, Citi, and Bank of America

Natural Resources:

Calpine [selected pages]: by Goldman Sachs, Credit Suisse, Deutsche Bank,


and Morgan Stanley
Business Services:
ISS Holding A/S: by Citi, Goldman Sachs, and Nordeo
Q: Awesome! Thanks for sharing all those with us.
What can you tell us about the technical and nancial modeling aspects of your
role?
A: Similar to what happens in Leveraged Finance, youll have to present the
companys case through a credit memo to an internal review board.
Its part of risk control you wouldnt want to underwrite a debt raise if the
company isnt going to be able to pay back investors.

The internal memo is pretty straightforward: i) Executive Summary, ii)


Transaction Overview, iii) Company Overview, iv) Financial Information, and v)
Loan Comparables.
The comparables dont include multiples like Enterprise Value / EBITDA as
you would nd in a set of equity comparables. Instead, as a corporate banking
professional you would focus on debt comparables, which include items like:
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Size

Maturity

Coupon

Debt Rating

The relevant metrics might include:


Total Debt / EBITDA
Net Debt / EBITDA
Net Debt / Free Cash Flow
EBITDA / Interest Expense
Free Cash Flow / Interest Expense
As you may have noticed, a junior corporate banking professional focuses
almost exclusively on credit analysis and he/she cares about these metrics
mostly on a historical basis.

Q: Ok, that was a pretty thorough walk-through of the key skills you would
gain as a corporate banking professional, but how do you determine which
companies receive loans in the rst place?
A: We have proprietary software for a Portfolio Risk Management system that
aggregates and averages expected yields on dierent types of notes.
We will usually run the loan product through to look at the market spread for a

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given instrument and duration. Afterward, we run a model to calculate the

marginal return on capital and economic contribution.

We have certain minimum thresholds for return on capital and the net revenue

we receive on deals. So, like any other deal in nance, it comes down to:

Where can we get the best return with the least amount of risk?

The most lucrative deals, as you would expect, are the loans we underwrite
ourselves.
Underwriting fees for Term Loans are signicantly higher than upfront and
annual fees for Revolvers, and also have the advantage of being xed amounts.
Beyond the origination, loans are constantly being amended and extended or
renanced with new facilities, which factors into the revenue structure as well.
Getting In and Getting Out
Q: How can readers get prepared to become corporate banking analysts?
A: The focus is very much on the debt side of the balance sheet. Leveraged
Commentary & Data is used quite a bit in leveraged nance to keep track of
leveraged loans and the like.

BMO Capital Markets provides a free weekly newsletter, and if you have a
Bloomberg Terminal, you can use the screen LSRC <GO> to search for corporate
loans. When it comes to industry overviews, LeveragedLoan.com and Standard
& Poors have assembled useful primers.
Most of your learning will take place on the job.
In my department, the training materials were rudimentary at best, and the

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bulk of the education came from participating in deals.


The senior banker is the greatest asset in your development, and most of your

knowledge will come from exposure to dierent loan facilities that you will

write credit memos for.

Q: What are the typical hours for a corporate banker? You said half the work

in the beginning, so I have high expectations


A: Corporate bankers are at the mercy of their clients and luckily, this means
summers are typically slow seasons.
Hours vary greatly depending on your outstanding deals and expected close
dates, but on a normal day, they can be anywhere from 9:30 AM to 7:00 PM and
later. When a deal is closing, late nights to overnight stays at the oce are
common.
Q: Um, that doesnt sound like anything close to half. Whats the deal?
A: Oh, its not its just that you wont see constant 80-100 hour workweeks
here unless youre in the middle of closing a deal. A normal week might be
more like 50 hours, so its still much better than investment banking.
The main dierence is that unlike in banking, youre not that busy all the time,
which creates much better hours overall.

Q: Lets talk compensation. whats the deal here?


A: Think of it this way: the bonus pool depends on how well your group
performs. And your own bonus is tied to how well you perform.
Analyst and associate salaries are comparable with those in investment
banking theres actually a quote from Liars Poker that Im quite fond of: He
hadnt told me what I would be paid, nor had I asked, because I knew, for

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reasons that shall soon emerge, that investment bankers didnt like to talk

about money.

NOTE: Based on the comments below, the interviewee here was referring to

BASE SALARIES, and NOT all-in compensation.

In most cases, the all-in compensation will be signicantly below what entry-

level bankers earn because bonuses are lower. Its still good money for an
entry-level job, but you will not make the same six-gure+ all-in
compensation right out of school.
Q: Thats a thin explanation, but I well run with it for now. What banks
dominate this market?
A: The benet of working at large banks is that size helps to execute larger
deals. JPMorgan, Citi, and Bank of America Merrill Lynch (all commercial banks
with large Balance Sheets) dominate the syndicated market and most deals will
involve multiple major players.
Other rms can be quite well-known in this area as well, such as CIT Group,
which focuses on sponsor-backed companies.GE Antares Capitals
Underwriting Department also competes heavily in the loan space.

Q: So whats the evolution of a credit analysis professional? Where do you go


after receiving a full-time corporate banking oer and working there for a
while?
A: Corporate banking professionals target the same exit opportunities that the
traditional investment banking and Leveraged Finance professionals do, but
with a more credit or debt-oriented focus. Somezzanine funds and credit
fundsare very common.

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Youll see these professionals transfer mostly in the latter category.

Commercial banks are also interested in the credit analysis skill set, as are

other corporate banking departments.

Q: Thanks so much for your time.

A: Glad to add some value to your work.

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About the Author


Luis Miguel Ochoa has worked in investment banking (industrials) and strategic planning. He
graduated from Stanford and wrote many of the best articles on this site on different industry
and product groups in banking.

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Comments
Read below or Add a comment

Tang
August 10, 2016

Hi there,
I am a corporate banking summer intern in NYC. I am mostly working on the credit memos and Enterprise
value model. I think the most relevent task relevant to IB is the EV model because I have to do DCF and
comps.
However, this EV model is considered to be unncessary for corporate banking because it is required by
the regulators. And the model is not as complicated and accurate as the real models in IB.
My question is: should I put down my EV experiecence in my resume to break into IB? IB people may think
my EV models arent as good as theirs
REPLY

John
March 6, 2016

In addition to what people have been asking above, it seems that your replies in the comments
contradict what the interviewee is saying above. She says corporate bankers can target the same exit
opportunities as those in IB. Yet you guys say that it is not common for corporate bankers to move to
PE?? Which is it??
Also, how difcult would it be to transition from corporate banking to IB full time? Thanks in advance!
REPLY

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1. M&I - Brian
March 12, 2016

I think the interviewee meant that corporate bankers target *some* of the same exit
opportunities as those in IB. For example, mezzanine funds and credit/distressed funds might be open

to both. Traditional PE would be tougher, as would certain type of hedge funds. I denitely dont think

its common for corporate bankers to move directly into PE most who do that go into IB rst. Its not
that difcult a transition to make if you target LevFin or other highly relevant groups.

REPLY

1. John
March 15, 2016

thanks brian! would you happen to know whether its common for people, who transfer into
IB/LevFin after a couple years in another job/division (such as corp. banking) to still have
opportunities to go to PE as an associate? or would PE rms generally think that it would be too late
since they normally want to poach rst year IB analysts?
REPLY

3.

Ejiro Edeki
February 7, 2016

Many thanks for the post. As an aspiring product sales manager in a bank, I enjoyed and learned
so much from the post and the rich variety of comments.
REPLY

1. M&I - Nicole
February 7, 2016

Youre welcome!
REPLY

Allen
October 29, 2015

Hi,
I have a second round interview in corporate banking in a couple days, and I am told it will be a case
whereby Ill be assessing the creditworthiness of a company. Any recommendations on how to prep for
this. Also, do you know of any websites that have cases out there I could use for practice?
REPLY

1. M&I - Brian
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November 1, 2015

We dont have any case studies on that specic topic, but some of our LBO modeling tutorials

in our courses and YouTube channel might be relevant. Generally, you have to look at the companys

credit stats and ratios under different scenarios, see how they change from best case to worst case,
and then factor in the qualitative points to come up with a recommendation.

REPLY

1. Allen
November 1, 2015

Great. Thanks for your help!


REPLY

Richie
August 18, 2015

Hi M&I, I would like to know what are the prospects of a Corporate Banking VP moving onto a
Investment Banking role (DCM/M&A). Thank you in advance.
REPLY

1. M&I - Nicole
August 20, 2015

I think this can be challenging unless you have corporate clients who want to do IPOs/deals
you can bring to your IB role, especially at your level.
REPLY

Coverage
June 15, 2015

Really good post.


Just trying to understand how corporate banking differs from coverage, if your still trying to sell different
bank products to the client ?

Thanks
REPLY

7.

Red Viper
March 9, 2015

Thanks for the great article!


Im wondering, why are asset-based lending groups often operated under commercial banking, when the
work entailed is essentially corporate banking? Are the base salaries in ABL comparable to those in
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banking?

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Jesse

January 2, 2015

In the end-goal of trying to break into Investment Banking, how would you rank the following

stepping internship offers in preference?

a) Big 4 Corporate Finance


b) IB/CF Boutique (actual boutique, not lazard/rothschild, etc.)
c) Corporate Banking at a not-top-4 BB
REPLY

1. M&I - Nicole
January 2, 2015

Id say: b, a, c. It really depends on the role and your responsibility at the rm though so it can
be hard to say.
REPLY

9.

Rob
December 25, 2014

I started in commercial banking with a BB, and had another offer from a difft BB. Both offers
were 60k, with a bonus +/- of 5k. I was there a year and a half, and switched to corporate banking at a
super regional as a Sr. Analyst. Base is 75k with a +/- of 12.5k for bonus.
At the two BBs, I have rst hand knowledge ofone, had corporate banking inclusive with the investment
bank and base salaries were equal at the 70-80-90 progression. Bonuses were much better than
commercial, at like 75% of what IB was. The other BB I had an offer for, had their corporate banking
seperate from IB and their base was 65. with a progression of 65-70-75. Their bonuses were also not
much larger than commercial with a +/- of 7.5.
REPLY

1. M&I - Nicole
December 26, 2014

Thanks for your input!


REPLY

Andres
November 17, 2014
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Hi rst year bachelors student looking at applying internships in various industries, interested in

PE or possibly HF in the long run, just to clarify are possible/frequent exit opps for corporate bankers

PE/HF(credit/distressed funds?)?
REPLY

Jason

August 11, 2014

Hey Brian,

Great article as usual. Corp Banking seems an interesting career so for someone applying usually they
get asked why CB over IB or S&T or even consulting since I got asked. Pretty sure there are obviously
many answers but I like Brian your thoughts about this considering the way you structure it. Anything you
can share on how to tackle this kind of question in an interview.
Thanks again
REPLY

DP
June 14, 2014

Does anyone know which banks have corporate banking housed under the same umbrella as IB
vs. those who keep it separate. I have a feeling it denitely plays a role in overall compensation, from
what I have seen in speaking with recruiters some CB roles are paying 60/70/80 vs 65/75/85 and nally
the traditional base which mirrors IB (70/80/90) for the analyst years. I am wondering if this depends on
the org chart and how the CB division rolls up or more of a case of some banks underpaying.
REPLY

1. M&I - Nicole
June 15, 2014

Yes I think it depends on the bank.


REPLY

Justin
May 9, 2014

Another great article thanks for this. Quick question do you know of any resources where I
could nd the models for a Term Loan or a Revolver? I am not even sure what to search for in terms of
terminology to get a correct search result in google. Any help would be appreciated as I am moving into a
hybrid corporate banking/syndicated nance position shortly.
Thanks again!
REPLY

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James

March 2, 2014

I recently accepted an offer for a Summer Analyst Role at a BB for Corporate Banking, I really

want to try IB. How can I leverage my current potions to land me a spot w/ the IB analyst class next

Summer? Disclaimer: I am currently a Sophomore


REPLY

1. M&I - Nicole

March 5, 2014

Id network a lot within the BB, especially with people in IB. Make sure you do a stellar job so
people remember you and your chances of securing an IB offer at the bank is higher
REPLY

15.

Enrique Flores
February 15, 2014

Hi. Thanks for the great article!


How are the exit opportunities from corporate banking credit analyst to private equity and hedge funds?
After two to four years as an analyst in corporate banking, what is a common path to continue in your
professional career?
REPLY

1. M&I - Nicole
February 15, 2014

I dont think it is common to move from corporate banking to PE/HF


Perhaps moving to retail banking or progressing within the rm; Im not 100% sure
REPLY

CB

February 7, 2014

Is there any chance that after a Summer in CB I land a FT offer in IB at the same bank ? Many
thanks
REPLY

1. M&I - Nicole
February 7, 2014

Yes there is. Network internally and perform well in your role.
REPLY
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1. CB

February 11, 2014

Thank you for your reply. I was wondering : when to ask and to who ? (CB HR, IB HR, IB

Senior)

REPLY

1. M&I - Nicole
February 11, 2014

Id go for seniors at the IB rst. You can do so via cold email and LinkedIn.
REPLY

Paul
January 26, 2014

Hi Brian,
I was just wondering: in order to secure a summer internship in IB at a BB, is it better to have a rst
experience in IB at a 2nd-tier bank such as HSBC or in Corporate Banking at a BB. Both being in the UK.
Thanks a lot
REPLY

1. M&I - Brian
January 26, 2014

Not much of a difference, but direct IB experience even at a lesser-ranked bank is probably
best.
REPLY

18.

Cbankers
December 8, 2013

What type of questions can one expect for an analyst position? I dont have any experience in ibanking or
corp banking.
Thanks,
REPLY

1. M&I - Nicole
December 8, 2013

http://www.mergersandinquisitions.com/investment-banking-interview-questions/
REPLY
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19.

Dubya
September 20, 2013

I am currently working as an analyst for a risk and portfolio management group for a large

European bank in NYC Wanted to know if there is a possibility for me to break into private equity after
working here for a year or so.

Will appreciate some input.

Thanks.
REPLY

1. M&I - Nicole
September 21, 2013

Theres a chance though it can be challenging


http://www.mergersandinquisitions.com/private-equity-recruiting/
REPLY

20.

E
September 12, 2013

Hello,
This was great and appealing; I appreciate the hard work displayed by this blog!
I am about to graduate from my university, and am currently working at a large bank on the retail side. I
have applied to a Corporate Banking position at this same bank.
After reading this post I believe I answered my own question; however Am I right in assuming that
CorpBanking is much more of a sales and relationship based position? If so that would denitely help in
telling my story!
REPLY

1. E
September 19, 2013

Any update?
REPLY

1. M&I - Nicole
September 20, 2013

I wouldnt say so because youd be doing credit and debt analyses which can be relatively
technical. Your hours are better so you may work less, which means you may do model a bit less
given your hours.
REPLY
Shares

2. Dub

May 13, 2014

Hi Nicole. I respectfully disagree. At the lower level of corporate banking it is more about

knowing and being able to understand and risk company nancials and how it sits with a particular
deal. But as you go higher, it becomes more about sales and you have people below crunching the

numbers. A good corporate banker (relationship manager) will need to be a numbers person, but

that can be taught, you cant teach someone to be a good deal acquirier (ie, sales person) and be
able to talk to C-level executives with ease. If you can source new deals then you are very valuable

as a corporate banker
REPLY

1. M&I - Nicole
May 14, 2014

Great! Thanks for your input.


REPLY

HB
August 25, 2013

Hi,
Corporate Banking for the last few months has seemed really appealing to me and I think it is where I like
to head into. I have an assessment centre lined up for LDN with a BB in Europe for a summer analyst
position in the next month or so, but I dont want to risk having only one shot at it.
Could you possibly advise on some of the major players in CB that I should look to apply to?
As far as I can tell, JPM dont have the area open to undergrads in EMEA..
REPLY

1. M&I - Brian
August 29, 2013

I believe it is mostly the large commercial banks that have solid CB teams because you need a strong
balance sheet to do it (see the pitch books and other links above). Readers may be able to better
advise you on the specic rms.
REPLY

CB
July 29, 2013

Will there be an upcoming interview for commercial banking?


SharesWhats

the main difference?

REPLY

1. Vp
August 5, 2013

Fundamental skills are pretty much the same, most obvious difference is of size, (say 50MM
in commercial vs. $500MM in corporate), and arguably corporate banking is more closely tied with

Investment Banking and capital markets.


Remember while youre lending to a company/client, you really dont expect to make millions alone just
on loans (infact a lot of times banks effectively lose money or have low returns), but when the same
company hire you for a ECM/M&A mandate or anything like that they would factor your lending
relationship with them in giving a piece of that business. Thats when you a bank looks at client and
calculate overall protably from a client and hence corporate banking seems to more closely tied with
IB.
REPLY

The_Sideline_Story
July 26, 2013

Thanks, Nicole.
REPLY

The_Sideline_Story
July 9, 2013

What keywords should I use when looking for this role on a job search board? Especially at an
entry level? Corporate Banking seems to bring up all things in the corporate bank from an AVP of wealth
management to a data scientist.
REPLY

M&I - Nicole

July 9, 2013

Perhaps you can type in leveraged nance and corporate banking instead something like
http://jobs.enancialcareers.hk/job-4000000001211210.htm should pop up
REPLY

25.

HarlemShake
May 28, 2013

Hello,
SharesI

just wanted to gain some more clarity around exit opps. Luis has mentioned CB analysts typical go for

the same opportunities as those from M&A, or LevFin. Ceteris paribus, are CB candidates at a
disadvantage when it comes to equity research, Long/Short, Activist HF?

Also, Id imagine its a tough sales pitch to lateral to a more traditional IB analyst position, are there any
particular skills IB (M&A or coverage group) value from CB candidates?

Thanks a lot for the response in advance!


REPLY

1. M&I - Nicole

May 28, 2013

Yes, credit analysis, any transactional models, possibly some valuation skills you learn, and
just the entire process of marketing a deal to investors.
REPLY

26.

Darryl
May 15, 2013

Amazing post. Sometimes its so hard to describe the structure and nature of my work to
someone who is not in the eld. This sums it up even for someone who might not know anything about
banking.
REPLY

1. M&I - Nicole
May 16, 2013

Thanks a lot for your input!


REPLY

27.

Lloyd
March 11, 2013

Great Article Brian, just a couple follow-up questions:

1) Do most of the corporate bankers move to Leveraged Finance after a few years? Since Leveraged
Finance is more modeling-intensive than CB, how can they prepare for it?
2) What are the comps like for senior corporate bankers? (VP/Executive Directors) Is that based on base
salary + bonus just like IB?
Thanks
REPLY

1. M&I - Nicole
March 11, 2013
Shares

1. Im not quite sure if most corporate bankers move to leveraged nance, though I believe a
few do. Please refer to http://www.mergersandinquisitions.com/leveraged-nance/
2. I believe IBs salaries are more than that in corporate banking, though I dont have the numbers on

hand.
REPLY

1. Anl
April 20, 2013

Am a corporate banker at a bb.


Salaries:
Analyst 70/80/90
Associate 95/125/150/175
Bonus ~50%-100%
As you can see, salary does not differ. Depending on rm performance, bonus wont either. This is
an annoying misconception that corporate banking and classic banking pay differs. In my bank they
both fall under ibd.
REPLY

1. M&I - Nicole
April 20, 2013

Thanks for clarifying, though I still think IB bonus/perks may be slightly different (I may
be wrong).
REPLY

1. Darryl
May 16, 2013

In my experience (especially someone who does NOT have an MBA but seems to
always take jobs marketed for Sr. Execs or fresh MBA grads).pay varies from rm to rm,
big and small, etc. Its all how you market yourself. There is no industry norm, high producers
and goal achievers will make money while those who are still learning or are comfortable in
their positions without growth vision will get paid less. Its like any other sector but with a lot

more money involved. Pay for performance; but in a lot of cases experience combined with
young age goes a long way if you can show your about business. Someone who works at a
large rm can make a ton of money but at the same time a small rm with 20 years less
experience can make the same salary as long as they have experience and prove themselves.
Its much easier to get the big titles in a smaller rm than a large rm especially for folks who
come from big banks. Just get title and go back into the large bank arena. Its a game we all
must master if we want to become successful. Corporate and IB divisions can be on the same
compensation level. It depends on individual. And a lot of times at the end of the day
banking is banking, especially in the syndicated loan market. If you cant make it past a certain
Shares

point, no matter what type of bank you work forconsider a career change or accept the fact

people MUCH younger and less experienced than you will be your boss and have a larger bank
account :)

2. M&I - Nicole

May 16, 2013

Thanks for sharing your experience with us

2. AJ

October 13, 2013

Any hints as to what BB youre at? I will be starting at Citi CB FT and want to get a feel for
bonus.
REPLY

28.

Romini
December 9, 2012

Brian, Since i also belong to Investment Banking (M & A) with a year of experience like the
interviewee, can you suggest me some good points to mention when a question arises in Corporate
Banking interview as to why would i want to switch from IB to CB?
1)what transferable skills should i mention?
2) Why now?
Also are the technical questions in the Interview guide relevant for preparing for CB interviews? what
areas should be concentrated on keeping CB in mind?
REPLY

1. M&I - Brian
March 9, 2014

1) Analysis, modeling, valuation.


2) Say that youre more interested in the credit / lending side and want to work across a variety of
different industries and company/deal types.

The LBO and debt-related questions will be most relevant for CB interviews.
REPLY

Vp
November 18, 2012

I added some comments here but somehow i dont see them..


Anyway, as a Corporate Banker in North America (have now worked in 3 banks), i can say the Singapore
model is very applicable in US too..CB in itself is not really a very protable business
SharesLook

at the following excelled primer by S&P:

https://www.lcdcomps.com/d/pdf/LoanMarketguide.pdf
REPLY

1. M&I - Brian

November 18, 2012

Thanks! Sorry about the comment issue, we automatically block any comments with links due

to spam problems. But if its legitimate, we approve it manually.


REPLY

30.

Z
November 17, 2012

Excellent post and Im delighted that corporate banking is given recognition here in M&I.
Ill like to share my experience on corporate banking; more specically, coming from someone working for
a multinational bank in Singapore. Corporate bankers (a.k.a relationship managers or coverage bankers),
are the rst point of contact for our corporate clients. Clients that we deal with are normally broken down
into three categories:
i) Top-tier local corporations These refer to government-linked entities or local conglomerates.
ii) Multinationals Fortune 500 companies with subsidiaries operating outside of their home countries.
iii) Financial institutions Banks, insurance companies and mutual/hedge funds.
Corporate bankers deal with all things credit, as our interviewee has shared in the article. But more than
that, they are also always involved in cross-selling the other products/services of the bank. Their
performance is determined by how much their portfolio of clients has grown by, normally in terms of
absolute revenue and risk-adjusted relationship return (Basel concept), on a year-on-year basis.
Hence, a corporate banker works very closely with almost every single department in the bank, from
operations to trade nance, cash management, IBD teams, etc. Its imperative that a corporate banker has
excellent credit analysis skills and working knowledge on every product/service offered by the bank.
What Ive shared on corporate banking is commonly found in large, multinational banks. Smaller banks
might have a different set-up. I do believe such a set-up is found in other Southeast Asian countries and in
Hong Kong, but do correct me if Im wrong.

REPLY

1. M&I - Brian
November 17, 2012

Thanks for adding that, very interesting to read about what CB is like in other regions.
REPLY

1. Vp
November 18, 2012

The above is very true for North America as well, Having worked in three banks (in

Shares

americas) within CB division here, this is very applicable here too.

Corporate Banking or lending to corporates (large companies) in itself is not a very protable
business (infact in this low interest environment), its no secret that banks are making losses on

these accounts. but when the same client gives you their M&A mandate, debt/equity issuance,

dreivatives business, then the overall corporate account begins to look a lot better from a P&L
perspective. There is an excellent S&P primer on how the loan markets in US has evolved

https://www.lcdcomps.com/d/pdf/LoanMarketguide.pdf
Look at my comments under Vp made at following link:

http://www.mergersandinquisitions.com/why-investment-banking-deals-fail/
Cheers!
REPLY

1. M&I - Brian
November 18, 2012

Thanks for adding that! Very helpful.


REPLY

31.

Nick
November 15, 2012

Excellent post. I am glad to nally see an article about CB as I have decided to pursue that role
out of undergrad instead of IB as you are still developing modeling/nancial statement analysis skills but
without having to work IBD hours and spending half your time doing pitch book revisions.
I was wondering what are the best ways to break in out of undergrad? I attend a top20 school with a top5
undergraduate business program but have not seen any CB postings from JPM, Citi, WF. There were some
posting for BAML but it was for commercial banking and not corporate.
REPLY

1. M&I - Brian
November 15, 2012

Thanks! Out of undergrad, your best option is to get an internship in a DCM or LevFin or related group
at a bank and/or at a credit rating agency so you get the skill set theyre looking for or just get an
internship directly in corporate banking. I think many of the large banks will focus on lateral hiring here,
so you might need full-time experience in a related eld rst, which is why they dont openly advertise
positions.
REPLY

2. LTCM
November 16, 2012

Let me guess Emory?

Shares

As Brian said, credit internships help, but I found any general nance internship gets your foot in the

door.
REPLY

3. Jim

March 23, 2014

Hi. This is probably outdated, but I recently read these comments. Wanted to advise that
BAMLs commercial banking division is pretty much what most banks would consider corporate
banking ($50MM-5B, mostly in the mid-hundred $MMs). The corporate banking divisions credit is run
out of risk management, where analysts/associates are far less involved in calls, prospecting, etc than
the commercial bank.
REPLY

1. M&I - Nicole
March 24, 2014

Thank you for your message.


REPLY

32.

KL
November 14, 2012

So what are the typical entrance requirements(school, GPA, major), as well as other potential
stepping stone careers (ie. public accounting) to enter corporate banking?
REPLY

1. DonDiego
November 15, 2012

I work in CB in a non-nancial hub. My analyst class was split about 50/50 of those fresh out
of school and those with real experience. Many analysts were currently in the process of obtaining
graduate degrees (almost all MBAs) and a few with post-grad accounting degrees. GPAs from what I
have seen/heard need to be about 3.2 from a reputable (but not ivy school)though some were with

most being nance/econ/accounting. I actually attended a small, not so great state school, but made
up for it with some ok experience (2.5 years), seasoned interview techniques, and I am in the process
of completing a MBA at a mid-tier school. However, being in school (part-time) was not looked well
upon by some MDs as our training was approx 60-70 hours a week for a few months. But I showed
them by scoring at or close to the top of our analyst class.
As for comp, the salaries noted about are about right. Adjusted for cost of living and working in
NYC,we would be in about the middle of what Russ stated for CB. Bonus structure has yet to be seen
reasons could be discussed later if M&I is interested.
As for work hours, I personally, work longer than most other analysts here. Im usually in around 630-7
Shares

and work until 5. The norm is 830-5.


REPLY

1. M&I - Brian
November 15, 2012

Thanks for adding that, very helpful to get another perspective on corporate banking.
REPLY

2. M&I - Nicole
November 16, 2012

Thanks for your input!


REPLY

3. Dub
May 13, 2014

I concur with above. I have worked in corporate banking (often called Relationship
Management) in Asia, Asia Pacic and Australia. You are the touch point for the clients and are like
a spoke in a wheel where you get other areas of the bank (ie, markets, treasury, trade, transactional,
DCM) to assist with deal execution. The corporate banker is usually the one that goes out and nds
the deals (along with the syndication team). At the corporate/commerical/business level (as per
below) the Relationship Manager is almost solely responsible for getting business through the door
(ie, lunches, business groups, referrals, networking)
Relationship managers operate in several levels of deal and client size. It can broken into several
divisions:as below (Australia/Asia)
i) Institutional (+US$500m turnover)
ii) Corporate (+$100m turnover)
iii) Commercial (turnover up to $100m, lending maxed at $20m)
iii) Business (Lending below $1m)
Bonuses where I worked were maxed at 80% of base if performance was 200% of target (KPIs
usually: revenue earned, net promotor score (NPS), +anything specic the bank wants to focus on
ie: assets (debt) or liabilities (deposits).

The bonus are not nearly as good as per IB, Leverage Finance, Project Finance or Markets (FX, IRS,
Commodities) where I found bonuses were relatively uncapped.
REPLY

33.

Russ
November 14, 2012

This is the salary scale Ive seen from my experience, friends and declined job offers.
iBanking: 60-80
SharesCorp

Banking: 50-70

Back Ofce: 40-60


The real differece comes out in the bonuses

iBanking: 30-60
Corp Banking: 5-20

Back Ofce: 2-10

IB and Back Ofce #s are for perspective.


*Disclaimer I work in a non-nance hub so I adjusted salary #s up for cost of living. (Bonuses change

based on deal ow, not much due to location)


REPLY

1. M&I - Brian
November 14, 2012

Thanks for adding that. I am assuming that the interviewee was referring to base salaries as
opposed to all-in compensation above.
REPLY

2. D
November 14, 2012

I can more or less vouch for these numbers they seem very similar to what Ive seen from
experience/friends/offers. Ive never seen a CB base of $50k though always thought it was 60-80.
REPLY

3. JP
November 16, 2012

I worked in corporate banking at one of the big Canadian banks in Toronto, compensation was
90K-100K base with bonus 25-60% of base for 1st year associates (experienced hires or MBAs)
REPLY

1. Vp
November 18, 2012

Concur!

REPLY

4. JobSeeker
November 3, 2015

Do these numbers still accurately describe the current job market?


Also, is there a back ofce for Corporate Banking or IBD? Or is Corporate Banking always a front ofce
group? I know someone thats in UBS and works in middle ofce for a role thats apparently front
ofce (equities).
REPLY
Shares

1. M&I - Brian

November 8, 2015

My guess is that the numbers are slightly higher now because the comment above was

posted a few years ago (2013). I believe there are back/middle-ofce roles associated with
corporate banking, yes.

REPLY

34.

Stoplying
November 14, 2012

comp is not similar to ibankers. i know this because i worked at citi with we all sat together (corp
banking and ibanking). can you be more specic with comp?
REPLY

1. M&I - Brian
November 14, 2012

See the comment below from Russ.


I am assuming that the interviewee was referring to salaries as opposed to all-in compensation.
I can understand how you might be angry or accuse us of lying, but it is literally impossible to factcheck every single statement that every interviewee makes and verify all numbers.
Well, we could do that but then there would be 5-10 articles published per year as opposed to 100+.
We go with what they say based on their experiences, and some groups, even within something as
specic as corporate banking, are compensated better or worse than others.
REPLY

35.

Couchy
November 14, 2012

ok so how much do they get paid?


REPLY

1. M&I - Brian
November 14, 2012

See the comment below from Russ.


REPLY

36.

Dre
November 13, 2012

Great article! This came at a perfect time.


SharesThe

article stated that several people have transitioned from working at credit rating agencies to

corporate banking.My group has a couple of more senior staff members who came in from the various
credit rating agencies.

Ive been taking credit training classes at a top credit rating agency (i.e. Moodys), however Ive been
unable to get any corporate banking interviews or offers.

What is your suggestion on using this experience to get into Corporate Banking?

REPLY

1. M&I - Brian
November 14, 2012

What have you been doing to win interviews so far?


I think it might just be an issue of lack of work experience my understanding is that they want people
with at least 1-2 years of experience at credit rating agencies so that youre well-versed in credit
analysis. Classes help, but its really experience + extensive networking that will make the difference.
REPLY

1. Dre
November 14, 2012

However, I see a lot of job descriptions that ask for training (i.e. Formal Credit training).
Im going to complete a training class, titled: Credit risk modeling which covers credit scoring, credit
bureaus, credit ratings, rating agencies, Basel, etc. Will this course be sufcient enough for getting
into Risk Management or Portfolio Management?.Depending on the bank, a risk management
or portfolio management group can be responsible for reviewing credit ratings and analyzing the
creditworthiness of companies. In such a setup, a team will be tasked with assembling credit
memos and managing the modeling aspect.
REPLY

1. M&I - Brian
November 15, 2012

Yes, they might ask for that training but ultimately they still want to see solid work
experience. I cant speak to risk management or portfolio management, but maybe ask on

bionicturtle.com as they have a knowledgeable community there.


REPLY

2. Vp
November 18, 2012

Your background sounds like bang on with what corporate bankers do..and credit rating
agency background is highly favorable.
Try to get some experience..assuming if its all training, add a spin to this training classes on ur
resume..Finally, this will get you an just interview. What will get you the job is very similiar to what
Brian tells you for IB interviews-

Shares

-Do i like you/will you t in..

can i present you infront of my clients..


REPLY

ANT

November 13, 2012

Sounds like a syndicate loan banker to me; corporate bankers dont only sell loans or capital

structure but also liquidity management, supply chain nancing and risk management.
REPLY

1. M&I - Brian
November 13, 2012

Ok. Feel free to contribute an interview if youve worked in corporate banking and would like to
share your experiences. This one was from Luis, so Im not sure of the specics of the interviewees
background.
REPLY

38.

D
November 13, 2012

1 bp = .01%, not .1%


REPLY

1. M&I - Brian
November 13, 2012

Thanks for the value-added comment there (sarcasm aside, thanks for pointing that out and
just corrected it)
REPLY

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