The fourth session of NHC Capital Markets Salon focused on Corporate Banking and it was held on Thursday November 29, 2017. The speaker, Michael Wang has more than 10-year working experience in corporate banking at RBC Capital Markets and China Construction Bank Toronto Branch.
Michael started his presentation with an introduction: what is corporate banking? Corporate banking provides corporate clients with credit solutions. Michael addressed that credit is the foundation of the banking industry. Corporate banking clients are corporations and financial institutions. Interestingly, corporate bankers seldom proactively approach clients. Normally, the investment bankers bring deals to corporate bankers. Similar to equity research, corporate banking is divided by sectors and requires bankers to fully understand the business model of that sector.
Corporate bankers are split up into front office, middle office, and back office. Each sector is quite different yet plays a crucial role in ensuring that the bank makes money, manages risk and runs smoothly. Front office is responsible for collecting data, preparing models, getting the deals approved by business council and risk council, and working with legal staff on documentation. In front office, different positions stand for different responsibilities. An analyst does large amount of leg-work and spends much time on learning. An associate might attend the client meeting, get access to more information and participate in the discussion during pre- screen process. As a senior-level position, vice president/director deals with clients, presents the cases to the business committee and requests approval. Middle office directly supports the people who are interfacing with clients via transaction management and collateral management. Back office processes documentation and compliance work.
The typical entrance requirement is a commerce background and some related work experience. In addition, Michael stated several other potential stepping stone careers. One career path is to start from middle office and then transfer to an analyst position in the front office. Another possibility is to switch from commercial banking to corporate banking. However, the structure of corporate banking team is flat, so the open positions are scarce. The candidate should have solid hard and soft skills, expand his network and have some luck. Michael also mentions some exit opportunities for corporate bankers. Corporate banking professionals could exit to investment banking, private equity, wealth management and other debt related jobs.