Finance Recruit: Careers in Banking
Commercial Banking (from CMC’s “Careers in Business” Guide)
Commercial Bankers perform core financial analysis to assess risk, creditworthiness, and the likelihood a business will succeed. They play a key part in deciding the best business initiatives, expanding existing businesses, developing new markets and clients, and creating new products for e-commerce, the Internet, international markets, and consumers. Retail and commercial credit, checking, and lending activities may be managed separately. Separate groups also handle regular loans, mortgage loans, and insurance products.
Commercial banks include small independent banks, "retail branches" of larger banks, large money center banks and banking holding companies. A small independent bank is, in essence, a small entrepreneurial enterprise that provides loans and liquidity to businesses and individuals in the community. Getting to know customers, reviewing loan applications, knowing how to tactfully decline those that do not meet credit requirements, and managing bank personnel: these are the bread and butter work of the independent commercial banker. A big commercial bank, in contrast, is a global business. Its activities include lending to large corporations all over the world, moving money to different overnight "parking places" where it can earn the most interest, trading in foreign currencies, managing huge infrastructures, and dealing with thousands of personnel.
Whether they are large or small, however, all commercial banks have one thing in common: they lend money. As part of that loan process they must persuade potential customers to borrow money from them rather than from another bank. They do so by offering better terms (lower interest rates) or larger sums, and by forming relationships with their customers, much like salespeople do. In other words, they "sell" loans, which are simply agreements to "rent" money. In a competitive environment, which banking certainly is, a commercial lender must therefore have excellent sales skills, because if he or she doesn't make the sale, someone else will.
In a large bank, the "selling" of loans takes place both externally (with the customer) and internally (with the bank's credit committee). Banks do not like loans to "go bad." Securing the assets of a bankrupt business is not nearly as profitable as lending to a business that repays the loan, with interest, right on time. So the lender, who has a relationship with the outside business customer, must convince a group within the bank that the profits involved in lending to that customer justify the risk, and that the risk is manageable. There is, naturally, a tension of sorts between the lender and the committee. The lender wants to "make the sale" (since part of his or her compensation is tied to how much money is lent). The credit committee, on the other hand, likes to play it safe. As a result, many lenders dread going before the credit committee and having their "package" picked apart and scrutinized from every angle.
Large corporate lenders travel a great deal, advising and entertaining potential customers (CEOs, CFOs, and treasurers in client companies). If the bank has an international presence, they may work with senior government leaders (e.g., the Minister of Finance) in the country in which they are based. Small independent bankers stay closer to home, becoming active in community activities, donating time and money to local charitable organizations, sponsoring Little League teams, and so forth. Both kinds of bankers, however, are ultimately engaged in the same task: making sure that customers turn to them for money.
Depending on the particular bank, retail and commercial credit, chequing, and lending activities may be managed separately. For example, it's not unusual for a distinct small-business product group to exist. Separate groups also handle regular loans, mortgage loans, and insurance products. Trusts and Estates is also a segregated service - for example, trust officers can work with business owners to make sure a family business is smoothly transferred from generation to generation. In other words, as you move up the ladder, you can specialize in a particular product area.
Regardless of where you sit in the hierarchy, you'll have to coordinate with specialist senior officers when selling specific products and services. If you're successful, you'll go from being a loan officer to a Relationship Manager - providing a seamless interface between clients and the bank's services, products, and groups. Finance Recruit: Careers in Banking
Commercial Banking (from CareerLeader)
OVERVIEW
Commercial banks perform two main functions:
lend money to businesses and individual customers provide individuals with checking and savings accounts, car loans, home mortgages, and automatic teller machines (all of which are collectively known as "retail" services in the banking industry)
Such banks come in several varieties:
Small, independent banks provide credit to businesses and individuals in the community. People who work at these banks get to know their customers, review loan applications, know how to tactfully decline applications that don't pass muster, and manage other bank personnel, such as tellers and "back office" personnel. "Retail branches" of larger banks provide the same services as the independent banks, but with greater resources (and often with greater bureaucracy and less autonomy). Large money center banks and banking holding companies are global businesses. They lend money to large corporations all over the world, move money to different overnight "parking places" where it can earn the most interest, trade in foreign currencies, invest in the capital markets, manage huge infrastructures, and deal with thousands of personnel.
Whether large or small, all commercial banks have one thing in common. They make a profit by lending money to customers. In fact, the interest that a bank charges for loans constitutes a primary source of revenue.
As part of the lending process, banks must persuade potential customers to borrow money from them rather than from another bank. They do so through various strategies:
offering better terms (lower interest rates) or larger sums forming close relationships with their customers, much like salespeople do
In other words, banks have to "sell" loans, which are simply agreements to "rent" money to their customers. Thus, a commercial lender has to have excellent sales skills. If he or she doesn't make the sale, someone else will.
Small and large banks sell their services, and enhance their reputations in different ways:
Smaller, independent bankers work close to home, actively participate in community activities, donate time and money to local charitable organizations, sponsor youth sports teams, and so forth. Large corporate lenders travel a great deal, advising and entertaining potential customers, such as CEOs, CFOs, and treasurers in client companies. Banks that have an international presence may work with senior government leaders (e.g., the Minister of Finance) in the country in which they're based.
In a large bank, the "selling" of loans takes place both externally (with individual customers) and internally (with the bank's credit committee). As you can well imagine, banks don't like it when loans "go bad" -- that is, when borrowers can't pay back the interest and principal they borrowed from the bank.
Finance Recruit: Careers in Banking
If a loan goes bad -- for example, the business that borrowed the money goes bankrupt -- a bank can secure the borrower's assets by working with bankruptcy attorneys and courts. However, this isn't nearly as profitable as lending to a business that repays the loan, with interest, right on time. So, a lender who works for a large bank needs to convince the bank's credit committee that the potential profits earned by lending to a particular customer justify the risk, and that the risk is manageable. Not surprisingly, there's a tension of sorts between the lender and the committee:
The lender wants to "make the sale" (because part of his or her compensation is tied to how much money he or she lends). The credit committee wants to play it safe. Therefore, it will scrutinize the lender's "package" from every angle and pick it apart, looking for potential problems.
Thus, a big part of a lender's job is to prepare compelling packages and to endure the examination of the credit committee -- something that some lenders dread.
If you enjoy crunching numbers and building relationships with clients, a job in commercial banking might be just the right fit for you. But, what kind of commercial bank would you prefer to work for -- a small, independent bank with roots in the community, or a large, heavily resourced bank with an international presence? The choice you make will greatly affect your work atmosphere and the clientele you serve.
INTERESTS
The key factor for a career in Commercial Banking is a high interest in Quantitative Analysis (compared to other Business Core Interests). This is not surprising, considering that accurate financial analysis is critical to the success of any bank. Most satisfied, successful business professionals working in this career hold this as a very strong interest. If your interest is relatively weak, this is likely to present a problem. One of the reasons these professionals chose this career -- and are successful and satisfied in it -- is precisely because it matches their interests.
At the end of the commercial banker's day, he or she does not have a brand of toothpaste, medical instrument, software program, telecommunications network, or fleet of jet aircraft to look at. Instead, a banker has a set of numbers on a balance sheet. If you don't enjoy "playing with numbers," and analyzing and evaluating financial reports and statements, you won't enjoy a commercial banking career.
MOTIVATORS
The ways people are rewarded in this, or any other career, can vary greatly from company to company, group (within the organization) to group, even manager to manager. Like what is required of you, the rewards you are likely to get early in your career are likely to be different in your mid- or later career years (and not only in pure compensation).
In addition, how people define rewards differs - and sometimes dramatically, from person to person. One person's "exceptional financial reward" (Financial Gain) may make another cringe, and turn away. One person's good Lifestyle means no travel, no weekends, and no evenings. While another's good Lifestyle means no travel on weekends, home by 10:00, and weekend work mostly being done from home.
These are the rewards that are, by most people's definition, generally found in this career. But, remember to take into account how you define each of the motivators CareerLeader assessed: Finance Recruit: Careers in Banking
Altruism: Many commercial bankers -- especially those who serve customers in their own communities - - feel that providing loans to local people and businesses helps build those communities. Similarly, managers for global banks who head up one of their institution's country offices play an important role in building the economy of that entire country. Lifestyle: Historically, the commercial banking industry has been a "kinder and gentler" area of financial services -- one that doesn't require the 100-hour workweek demanded by Wall Street. However, this appears to be changing in international and large corporate banks, where bankers are expected to work long hours and travel a great deal. Positioning: A career in commercial banking also enables you to set yourself up for further career growth. In addition to internal advancement, commercial banking offers a great deal of contact with customers. Many of those clients are senior-level managers in their own companies, and can help you transition into working for a client company. Security: In this increasingly competitive industry, bankers who have marketable and transferable skills -- such as knowledge of (and contacts in) a particular industry, or the ability to work with distressed companies -- will garner far more security than those who lack such skills. If you strongly value predictable salary, benefits, and future employment, make sure to manage your professional development and marketability. A cautionary note: Commercial banking does not offer a great deal of Autonomy, particularly in the larger banks, where there is an extensive chain of command. People working in commercial lending may have more autonomy on a daily basis, but they have to get approval for every loan they want to make. In general, commercial banking is not the place for people who want a very high degree of Autonomy.
SKILLS
The skills listed below are most critical for success in this career. Of course, how important they are relative to each other may change over time, and skills not listed here may become important later in your career. Also, a skill not on this list can be important if it is a marked deficiency. For example, Openness to Criticism -- one of the skills not seen here -- may not be essential to success in this career. But, being virtually incapable of accepting critical feedback, in a non-defensive manner, will almost certainly result in failure.
Some people find it surprising that interpersonal skills are so important in commercial banking. But, commercial lending -- the heart of the business of a bank -- is all about "selling" money (or, more accurately, selling loans and "renting" money). Successful bankers need to interact frequently with customers and colleagues, gain their confidence, and persuade potential borrowers to do business with their institution. They also have to work internally as a team member of their banks.
A successful career in commercial banking requires:
Gaining Trust: Inspires other people's trust. Influence: Can influence and persuade other people, even without direct authority. Oral Communication: A skillful public speaker, good at presenting ideas and plans in a persuasive manner. Political Skill: Knows how to get things done within the political framework of an organization. Projection of Confidence: Projects self-confidence, even in uncertain and difficult situations. Quantitative Analysis: Skillful in using quantitative analysis to understand business issues. Sociability: Socially venturesome and self-assured; forms new relationships easily and works to maintain them. Teamwork: A team player: cooperative, works well as part of a group. Written Communication: A good writer, expresses ideas and positions clearly. Finance Recruit: Careers in Banking
Small Business Advisor (from CSI.ca’s “Career Planning Map”)
The Small Business Advisor's job is to meet the total banking needs of small business owners. The Advisor is responsible for the sales of small business financing solutions to businesses and to business owners, as well as providing solutions to business owners for their personal financial needs. They are fully familiar with financial statement analysis and understand the meaning of financial ratios and their relevance to the small business operation.
Responsibilities include:
. Designing/originating small business loans and lines of credit . Researching the business client, competitive environment and potential challenges of the business operation . Evaluating the credit request and analyzes risk and return factors . Networking within the local business community to build referrals and centres of influence . Providing recommendations on deposit, cash management and payment processing needs . Coaching the branch sales team to identify and generate quality small business referrals . Reviewing and analysing business financial statements and personal financial statements and evaluates the strength and challenges of the business operation and management. . Providing financial planning, estate planning, powers of attorney, wills and family trusts, creditor insurance and tax advice in light of both the clients business and personal financial situation
Alternate Name
Financial Advisor Business, Small Business Banker
Earning Potential
$55,000-$75,000/year
Finance Recruit: Careers in Banking
Sample Job Posting: Commercial Banking Associate @ CIBC
Business Unit Description:
CIBC Commercial & Business Banking is committed to Partnering with Canada’s BestTM organizations. Our comprehensive approach provides industry expertise, innovative ideas and strategic solutions designed to create, protect and realize stakeholder value. Partnering with clients with annual sales of between $1.0 million to $500 million, Commercial & Business Banking provides integrated financial solutions to address virtually every business requirement at every stage of a company’s development and operation, including credit, asset- based financing, subordinated debt, trade finance, cash management, franchising, foreign exchange, investments, M&A and private placements of equity and debt. Our Relationship Managers and Senior Business Advisors are located in regionally based centres and branches across Canada, ensuring first hand knowledge of local market conditions.
Relevant Job Criteria:
- You must have prior legal authorization to work in the location for which you are applying.
- Relocation assistance is not available with this opportunity.
Career Overview:
PURPOSE OF JOB:
Under the mentoring of a Director or Senior Director, the Associate, Commercial Banking will provide support to one or more account teams through the client acquisition, relationship management and credit management processes as well as providing transactional support for client specific financing solutions. The Associate Commercial Banking will perform financial and statistical analysis while developing a solid technical grounding in the dynamics of targeted industries represented by the clients/prospects to which the Associate is assigned to support . The Associate will become an expert resource for the client team by becoming aware of industry trends & issues, regulatory issues, economic/political trends and client specific issues/needs. The Associate will apply this knowledge in the development of proposals and solutions to proactively meet clients' needs.
MAJOR ACTIVITIES:
Support For Portfolio Management o Conduct risk, credit and financial analysis for existing and new financing opportunities. Analyses include industry research, competitive analysis, management assessment, financial performance/structure, cash flow Finance Recruit: Careers in Banking forecasts/sensitivity etc; o Contribute to the achievement of growth targets by identifying business opportunities and developing creative financing solutions; o Prepare analyses in support of credit submissions, including structuring and documentation; o Monitor the terms and conditions of approved credit arrangements; o Be familiar with appropriate due diligence criteria and effectively conduct such analysis and enquiry investigation to provide CIBC with an appropriate "due diligence" defense under applicable securities legislation; o Establish and maintain contact with clients throughout the process to obtain/provide information and advise, conduct interviews, and relay information regarding the process and CIBC's requirements; o Assist with financing proposals and pricing strategies which ensure achievement of targeted profitability thresholds; o Follow up on credit-related customer queries and customer service-related matters not otherwise covered by Credit Processing Services (CSP). Act as liaison with officers at CSP; o Liaise with other units of CIBC in preparing credit reviews and proposals for clients' financing needs; o Ensure that administrative processing of credit facilities is completed including signing authorities, non/negotiable securities.
Support For Origination o Apply acquired industry/company knowledge to the development of points of view and specific client/prospect proposals for financial and strategic solutions to meet identified needs; o Assist the Director/Senior Director in coordinating the activities of the client team through the sales cycle, liaising with other units of CIBC and CIBC World Markets as necessary; o Assist the Director/Senior Director in identifying and analyzing business growth opportunities through comprehensive industry , client and prospect research; o Assist with the execution of business development initiatives and client functions as appropriate to enhance relationship capital and/or prospecting potential; o Interact with assigned clients as required to facilitate prompt response to questions, enquiries or issues which fall outside the scope of the Business Contact Centre in order to achieve ultimate client satisfaction;
Finance Recruit: Careers in Banking
Requirements:
KNOWLEDGE/SKILL REQUIREMENTS:
o Knowledge of business affairs and the financial industry typically acquired though a University business degree or other professional designation. (B.Comm, MBA, CA, CGA, CMA, CFA); o Previous corporate finance/corporate lending experience is preferred; o Developed understanding of Corporate Finance theories and practices; o Well developed analytical ability, with a solid understanding of financial statements and accounting principles, and a demonstrated knowledge of valuation techniques and practices, including cash flow analysis; o Well developed interpersonal and presentation skills to actively participate in developing and maintaining productive client relationships; o Strong verbal and written communication skills in order to convey factual and conceptual information to others; o Well developed organizational and self management skills in order to respond to shifting priorities on several simultaneous projects as requires; o Effective team player and ability to work well within a group setting; o Solid problem solving and issue resolution skills; o Extremely dedicated and motivated individual with high career aspirations. Must be capable of assuming significantly increased levels of responsibility within short time frames; o Strong technical ability with Microsoft Office suite, particularly Excel, Word and Powerpoint as well as ability to quickly learn proprietary software applications supporting origination and credit processes; o Ability to work in a deadline driven, matrix environment;
CONTACTS:
o All units within Commercial Banking including Investment Banking, Mezzanine Finance, Real Estate and Franchising groups, Corporate Finance, and Portfolio Management teams. o Partners across the broader CIBC and CIBC World Markets including Credit Capital Markets, Debt Capital Markets, Corporate & Commercial Adjudication, GICs, Deposits & Payments, FX and Money Market Sales, Legal Division, Tax, Finance/Accounting, Credit Processing Services and Business Contact Centre. o Externally, direct contact with Chief Executive Officers and Chief Financial Officers of Commercial Banking client and prospect companies as well as other members of the senior management teams of our client companies and external legal firms.
Finance Recruit: Careers in Banking
COMPLEXITIES/CHALLENGES:
o Providing excellent customer service while managing pressures generated externally and internally; o Utilizing our credit and sales tools to identify alternative solutions for the client; o Keeping current on all relevant products/services and developments in financing in order to provide the best ideas and solutions to meet client needs; o Learning and developing a full working knowledge of all the tools, policies and processes associated with the position; o Managing within a matrix, team driven environment characterized by multiple, competing priorities.
PHYSICAL DEMANDS/WORKING CONDITIONS: o Multi tasking; o Deadline oriented environment; o Willingness to work extended hours, and has the personal flexibility and adaptability in order to meet client requirements; o Occasional travel within Canada.
Skills:
Accountability
Analytic/Systematic Thinking
Conceptual Thinking
Results Orientation
Service Orientation
Finance Recruit: Careers in Banking
Sample Job Posting: Business Banking Officer @ Coast Capital Savings
What is the job?
As our Business Banking Officer, you’ll be the friendly face that meets with our business customers to provide helpful service, despite your serious-sounding title.
You’ll be responsible for:
Attracting and onboarding new business customers Identifying the needs of our business customers then suggesting products and services that would be helpful Assisting our business customers in accessing alternative service channels, such as online banking, payroll deposit and pre-authorized chequing services Supporting the lending needs and account administration of business customers
Who are we looking for?
We’re looking for someone with a solid knowledge of the needs of small businesses. You’ll also need: Banking experience including lending, commercial banking, portfolio management and business development A Bachelor’s degree in business administration or related field Demonstrated business acumen and ability to understand financial statements Top-notch sales skills, including evidence of reaching and exceeding identified targets
Who are we?
Coast Capital Savings Credit Union is Canada's largest credit union by membership with 504,000 members, total assets under administration of $14.6 billion and 50 branches in the Metro Vancouver, Fraser Valley, and Vancouver Island regions of British Columbia. Product innovations include Canada's first free chequing account from a full-service financial institution and the country's most flexible mortgage product, the You're the Boss™ Mortgage, which was named 2010 Mortgage of the Year by canadianmortgagetrends.com. Coast Capital offers one of Canada's 10 Most Admired Corporate Cultures™. It is a member of Canada's Best Managed Companies Platinum Club and an Imagine Canada Caring Company. To learn more, visit www.coastcapitalsavings.com.
Finance Recruit: Careers in Banking
Sample Job Posting: Commercial Banking Trainee @ HSBC
As a member of the Commercial Banking team, a Relationship Manager (RM) specializes in providing customized banking solutions to business owners and professionals. Relationship Managers in CMB work with a firm’s financial team, understanding the business, and providing a broad range of services and products to support that client’s financial goals and business objectives.
Impact on the Business •The Fast Forward Program: You will train with experienced Commercial Banking staff to become an Account Manager in our Commercial Banking division. It will allow you to develop front-line experience of dealing with customers, as well credit and financial statement analysis skills. In so doing it will give you a thorough grounding in the fundamental aspects of managing business customer relationships. You'll be learning how to build and manage your own portfolio of customers and developing your knowledge of businesses in your local area so at the end of the program, you'll be ready to become a relationship manager and take responsibility for your own portfolio of business customers In your training, you will gain exposure to the following areas: •Business Banking: In this line of business, you will be working with small businesses to provide them with day to day banking solutions. Your customers have complete confidence in your ability to handle their credit needs and expertly manage their portfolios. This credibility is the result of your uncanny talent for identifying client needs, understanding their business objectives and delivering results. You are equally adept at developing strategies for managing and growing a diverse, business banking-focused retail banking portfolio, unleashing your solid networking and pipeline-filling techniques •Mid-Market Enterprise: You will apply seasoned account management prowess to strategize with large, complex and important mid-market customers’ and prospects’ to cultivate profitable, long-term relationships. Keen and quick to understand their needs, you will have the latitude to develop customized and catered solutions across the full breadth of HSBC business products and services including credit, investment services, Premier Banking, Trust, trade finance, treasury, commercial, cash management, electronic and foreign exchange products. A model of consultative sales and business development, you will mentor your colleagues as you in turn develop and progress within a truly international network of top-performing individuals •Commercial Real Estate: In this role, you will help manage an extensive credit and loan portfolio of commercial, residential and industrial real estate clients. This is your chance to work with sophisticated clients and become a specialist in commercial real estate. As part of a small team, you will be recognized for your contributions and given many opportunities to develop your leadership skills. And thanks to our large portfolio of existing clients, you will have the potential to make big sales in the future •Payments & Cash Management: HSBC Bank Canada provides superior services that allow companies to manage their business transactions with speed and simplicity both domestically and globally. HSBC provides the solutions that empower businesses to efficiently manage their payments, reduce error rates, deliver payments on time and improve their cash flow capabilities
After successfully completing a rigorous 12 month on-the-job development program, you will have the tools needed to manage your own portfolio of commercial business clients in one of the three business segments. As a member of HSBC Bank Canada, you will find a wealth of support throughout your training process. Finance Recruit: Careers in Banking
Duties and Responsibilities •During your Fast Forward training program in Commercial Banking, you will: •Learn skills that allow you to consistently achieve demanding sales targets •Broaden existing relationships and develop new customer relationships •Apply your knowledge of finance to analyze company earnings statements and financial reports •Structure commercial banking solutions for our clients, crafting tailored offerings with your deep knowledge of HSBC products and services •Maintain and grow a strong commercial portfolio of business Operational Effectiveness & Control •Decisions beyond assigned authority are referred to higher management Management of Risk •Ensure compliance, operational risk controls in accordance with HSBC or regulatory standards and policies; and optimize relations with regulators by addressing any issues •Promote an environment that supports diversity and reflects the HSBC brand Observation of Internal Controls •Maintains HSBC internal control standards, including timely implementation of internal and external audit points together with any issues raised by external regulators
Qualifications We are seeking creative, energetic and principled post-secondary graduates who have a deep understanding of the world of business. They also know how to sell: themselves, their ideas and products, and know how to build relationships with a diverse range of potential clients. You may be the individual we seek if you:
•Possess a bachelor’s degree from a recognized university •Have the confidence and skills to effectively interact with a diverse range of commercial clients •Can apply strong analytical skills to evaluate complex, financial service needs with independent and innovative thinking •Are energized by the challenge of setting and reaching sales targets in a fast-paced, professional environment •Have excellent interpersonal skills and the ability to quickly establish rapport with clients and colleagues •Can manage multiple tasks under competing deadlines and changing organizational dynamics •Solid organizational skills, independently prioritizing and coordinating responsibilities in a busy, sales and service environment
Our customers and many of our employees come to Canada from all parts of the globe. Fluency in English is a must, and fluency in a second language (or more) is always a plus. HSBC Bank Canada has particular need of qualified candidates who also possess fluency in French or languages of the Asia Pacific and South East Asia: Cantonese, Mandarin, Korean, Japanese, Urdu, Punjabi, Hindi, and others. All applicants must be legally authorized to work in Canada.