Careers in Commercial Banking Presentation - 210816-103043

Careers in Commercial Banking
Course Objectives
Discuss what a commercial bank does Look at different roles in commercial Provide guidance and insight around
banking some potential career paths
Help you identify the best possible Make sure you better understand how
role-fits based on experience, technical the different roles work – and work
skills, and personality types together – in order to help you prepare
for the commercial banking recruiting
and interview process
Corporate Finance Institute®

Introduction
The Banking Spectrum
Business Commercial Corporate

Mid-size and less Large companies
Small business
complex large with more complex
owners
companies needs
<$5MM Revenue Focus of this course $100MM+ Revenue
<$2MM Borrowing $50MM+ Senior Borrowing
Owner-Operated Publicly traded
Simple Credit Structures Complex Credit Structures

The Banking Spectrum
Lenders and businesses usually have a borrowing relationship supported by a team of qualified credit
professionals.
Mid-Market Companies
Qualified Lending
Professionals
This course will teach you how to support these mid-market clients
while setting you up for a career in this field.

Industry Focus
There are countless types of businesses that may seek commercial borrowing from their financial institution.
Technology Agricultural
Manufacturer Wholesaler
Companies Enterprises
Professional Medical
Retailer Restaurants
Services Firms Professionals

Industry Focus
Financial institutions will often have specialist teams, also known as ‘specialist desks,’ dedicated to covering
one particular industry.
Financial
Institution Specialist A Specialist B
Geographic realities create a more concentrated client portfolio at a financial institution. For example, if the
bank is located in an oil-rich region, it is possible the credit portfolio has a heavy concentration of borrowers in the
petroleum supply chain.

Industry Focus
Diversified Portfolios
Requires expertise in many industries

Types of Borrowing
Commercial borrowers usually have multiple loans called credit facilities. These can be broadly categorized into
operating credit and term financing.
Supports day-to-day Acquisition of longer-term

operations assets
Includes overdraft facilities Execution of longer-term

& operating lines of credit initiatives
Specialized short-term Operating Credit Term Financing Acquisition of another

credit: PO financing, A/R business or division
factoring

Types of Borrowing
Commercial borrowers usually have multiple loans called credit facilities. These can be broadly categorized into
operating credit and term financing.
Supports day-to-day
Term Loans
operations
Includes overdraft facilities

Capital Leases
& operating lines of credit
Specialized short-term Operating Credit Term Financing Commercial Mortgages

credit: PO financing, A/R
factoring

The Purpose of a Commercial Bank
The purpose of a commercial bank is to serve three functions:
1 2 3
Hold Money Move Money Lend Money
• Checking or savings • Facilitates movement • Interest income is a

accounts of funds through major driver of revenue
centralized clearing
• Term deposit or money houses • Once a borrower has
mark funds multiple credit facilities,
• Checks, ETFs, Wire it is less likely they will
• Supports corporations payments leave for another bank
with treasury functions
• Online payments and
credit cards

The Purpose of a Commercial Bank
Analyzing credit risk and underwriting commercial credit facilities are the most important skills that a
commercial banker must master.
Commercial Banking & Credit

Analyst Program (CBCA)

Learning Roadmap
There are 7 main roles in commercial banking.
Relationship Team Middle Office Back Office
Relationship Manager Workout Banker Fulfillment Officer
Credit Analyst Adjudicator
Credit Associate
VP Commercial
Workout Banker

Learning Roadmap
There are 7 main roles in commercial banking.
Credit Associate
VP Commercial
Workout Banker

Learning Roadmap
The remainder of the course will cover the following for each job title.
Skillset and
Duties and function of A day in the life for
personality suited to
the role each position
the position
This information will be helpful in mapping out a prospective career path in commercial banking and
will prepare you for the recruiting and interview process.

Commercial Banking Process
Using a commercial loan request as a simple example, let’s plot where each role fits in the process.
VP Commercial
Relationship
Client Adjudicator Client
Team
Proposal
Relationship
Manager Risk Management
group
Back and
Credit Associate
forth
Legal counsel
produces
Credit Analyst paperwork

Commercial Banking Process
If, in the future, the loan somehow went bad, the client may be transitioned to the bank’s “workout group” to
renegotiate terms or to collect on the collateral security.
Relationship
Client Adjudicator Client
Team
Proposal
Workout Group
Responsible for renegotiations in the
case where a loan goes bad

The Relationship Team
Commercial banking can be confusing because job titles may vary by institution or geographic norms compared
to other roles in financial services.
Investment
Trader Financial Advisor
Banking Analyst
Same in Most Parts of the World
Commercial Relationship Account

Loan Officer
Banking: Manager Manager
Differs Depending on Market

Throughout this course, we will provide a list of the different titles you may hear, but the description and the
duties of each role will generally align.
The relationship team is the front

office of the financial institution.
The relationship team is responsible for They are under constant pressure to deliver strong
1 understanding their client’s needs as well as

understanding and communicating bank 2 growth and financial results. This requires sales,
service, negotiation, and communication skills
guidelines and policies to the client’s finance team. while being experts at underwriting credit.

Relationship Manager
Credit Associate
VP Commercial
Workout Banker

While the job has many perks, it is extraordinarily challenging and may feel thankless at times.
Assigned a book of Responsible for

commercial clients growth
Maintain and build existing relationships: Develop new relationships and find business:
• Extend further credit or support • Cold calls or networking with industry groups.
• Optimize cash collections and disbursements • Building a referral network including lawyers,
accountants, or brokers to funnel opportunities
• Complimentary service offerings directly to the RM.
• Senior Relationship Manager

There are many skills required to be a successful relationship manager.
1 2 3 4
Strong credit 3- 5 years of Terrific negotiation Juggling multiple

acumen – Identify experience in skills and is great tasks at once is
creative solutions supporting with people imperative
for clients commercial roles
Senior portfolios with complex borrowers may have between 20 – 40 clients, whereas less tenured RM’s may
have 60 or more smaller clients.
RM’s from different firms may be hired by competitors willing to pay for their experience and business contacts.

A Day in the Life – Relationship Manager
Morning Non-funding Off-site

Overdraft Report Days Engagements
• Due to timing lags between cash • Take clients out to lunch to thank • Check up on equipment and
outflows and inflows, it is common them for their business and uncover projects that are being financed by
for RMs to see multiple client new opportunities the bank
overdrafts
• Dine with influencers – like • Networking events or seminars
• If the overdraft is large enough, accountants and lawyers – to
the adjudication team is asked for generate new business • Sporting events or activities
input
• RM needs to inform the client if

the bank is willing to approve the
overdraft

Associate
A credit associate is a less glamorous role than the RM, frequently held by less tenured banking professionals.
Credit Associate
VP Commercial
Workout Banker

Associate
The biggest part of this role is staying on top of client requests and being proactive to get ahead of them.
1 2 3 4
Facilitating large Ordering cheques Client’s first point Responsible for

payments for the and resolving of contact for onboarding new
client’s accounting credit card day-to-day matters clients
team problems
A good associate is extremely patient and proactive and usually a great listener.
They have strong sales acumen but lack the institutional knowledge and credit experience required to work as
a relationship manager. It is likely that successful candidates are more extroverted.

Associate
To be successful in an associate role at a commercial bank, candidates need to be able to multi-task and
manage their time effectively.
Learn how to prioritize Make each client feel

Juggle multiple tasks
tasks according to their like they’re the bank’s
at once
relative importance top priority
New candidates for associate roles are generally junior but not straight out of school. Since there’s a lot of client
interaction, a bit of client-facing experience generally helps a lot.
Most financial institutions expect a 2–3-year commitment in this type of role before considering the candidate for a
promotion.

A Day in the Life – Associate
Email and Market Time on the

Phone calls Intelligence Road
• Mornings are heavy on email and • Rate Changes on term deposits or • Getting signatures on documents
phone calls material movements in foreign
exchange rates • Dropping off client cards
• May have to take and triage calls
on behalf of the Relationship • Technological developments or • Other administrative tasks while
Manager bugs with existing systems that the Relationship Manager is tied up
affect clients
• Get profiles and accounts set up
for new clients, to ensure credit • New product or service offerings
facilities advance smoothly that the bank is rolling out
• May schedule client pricing reviews

Credit Analyst
Credit Associate
VP Commercial
Workout Banker

Credit Analyst
There are two main functions of a credit analyst at a commercial bank.
Support the structuring process Work with existing clients

for new clients, and to gather reporting to
transactions for existing clients monitor covenants
Every financial institution has a list of policies and guidelines for certain credit facilities.
When the relationship team meets with a prospective client, it is important that the analyst prepares by reviewing
industry-specific policies and guidelines.

Credit Analyst
When the relationship team is structuring a deal for the adjudication group, the analyst will do a lot of the
detailed work.
Analyst’s responsibilities may include:
• Understanding how the valuation was derived
• Corroborating data and comparables
• Identifying any property-specific risks
An analyst will become fluent in the deal in order to help the relationship team.

Credit Analyst
A credit analyst typically has a good understanding of accounting principles and strong financial acumen.
Commonly working towards accreditation of some kind, like a CBCA or FMVA.
Reflective,
A strong grasp An eye for
knowledgeable,
of the economy detail
and curious
Credit Analyst

Credit Analyst
There are generally two types of people that seek a role as a credit analyst.
• Junior staff with great technical • Tenured commercial banking

skills professionals
• Want to learn the bank’s systems • Lots of experience in analyzing

and processes and structuring deals
• Fresh out of business school, or • Do not want the lifestyle and sales
with some finance experience targets tied to being an RM

A Day in the Life – Credit Analyst
Status of Current Growth and Travel Locally with

and Pending Deals Annual Reviews Relationship Team
• Transactions sitting with the • Growth tends to be a major focus • Conduct site visits and sit in on
adjudication team for financial institutions client due diligence discussions
• Time on the phone sorting through Annual Reviews: • New money transactions are very
specific questions or concerns exciting
• A credit analyst may be
overwhelmed with annual reviews • Ensure compliance with local
regulatory bodies
• Dec 31st fiscal year-end
• Annual Reviews and renewals are

prioritized from March to June
• Seasonal fluctuations

VP Commercial
Credit Associate
VP Commercial
Workout Banker

VP Commercial
A VP commercial, or director, is the individual that leads the relationship team.
Ultimate authority Support especially May have up to a

over pricing challenging dozen RM’s that
exceptions negotiations report to them
The sum of all the RMs’ books makes up a portfolio of business for which the VP is
responsible for achieving loan growth and revenue targets.
Oversee the onboarding of new team members and support everyone's career aspirations
within the organization.
It is an extraordinarily high-pressure position.

VP Commercial
Most VPs have a minimum of 8-10 years of experience in the field, working their way up through other roles.
1 2
Successful VPs are leaders, Strong credit skills and
teachers, and mentors financial acumen to navigate
first challenging client relationships
3 4
Proven in a variety of
Extremely organized,
other commercial banking
understand the bank
roles to have attained
more holistically
knowledge and expertise

A Day in the Life – VP Commercial
Business Development Time with the

Time in Meetings
Initiatives Relationship Team
• Progress updates with team • Leverage long-time community • Conduct site visits in the field with
members at least bi-weekly relationships to generate the relationship team
partnerships or referral business
• Follow along with progress on • Sponsor events to thank big clients
different transactions • Advisory work with local business and generate goodwill with prospects
organizations
• Network with senior executives

from other divisions of the bank
• Spend time keeping up with

community initiatives

The Middle & Back Office
The Middle and Back Office
Credit Associate Risk Management

Function
VP Commercial
Workout Banker

The Middle and Back Office
If loan growth is the main objective of the relationship team, the middle office's main purpose is to mitigate
loan loss.
The natural push/pull relationship ensures financial institutions do not take on too much risk.
While there are a huge number of back-office functions, we’re focusing on loan fulfillment.

Workout Banker
A financial institution’s “workout group” may be called “special assets” or “special accounts.”
Workout Group
Responsible for renegotiations in the case
where a loan goes bad
When the risk of default is high, a file will be pulled from the field and sent to the workout group for a more
hands-on approach, with the end goal being an alternative repayment strategy to cover the full debt.

Workout Banker
The role of a workout banker is to approach situations carefully, respecting how difficult and stressful it is for the
owners and the management team.
With the exception of fraud cases, it’s usually in both parties’

best interest to work it out because the alternative is to collect
on the bank’s security.
1 2
Selling assets means The bank may have to
the business is likely write off some of its
finished principal

Workout Banker
The key to being a good workout banker is knowing when to forebear and restructure and when to cut the
bank’s losses.
Strong financial acumen Understanding of the Considerable patience and

including modeling and legal process that goes people skills to ensure
accounting skills into a liquidation scenario everyone remains objective
Most workout bankers have considerable experience in other roles and often have legal or operations
backgrounds.

A Day in the Life – Workout Banker
On the Phone with Documentation

Time in Meetings
Clients and Tracking
• Mornings spent on the phone • Responsible for daily or weekly • With distressed borrowers, every
with clients, legal teams, and the updates with their leadership team piece of communication must be
lender’s legal counsel clearly documented
• Due to the amount of outstanding
• Monitor developments that principal, regular reporting and • Ensure the legal enforceability of all
change the risk picture updates are critical agreements
• Leveraging their network to find • Clients at this stage are far more
alternative financing structures to likely to end up in court than clients
help clients and reduce the bank’s with performing credit facilities
exposure

Credit Adjudicator
Credit Associate Risk Management

Function
VP Commercial
Workout Banker

Credit Adjudicator
A credit adjudicator, or risk manager, has the final say in whether a transaction is approved or declined.
Risk Appetite Regulation
1 Review all due diligence material

and the analysis provided by the
relationship team
2 Must ensure that sufficient
evidence is provided to support
adjustments and value calculations
Tasked with answering the question: Does this transaction represent a sensible level of risk for the financial
institution?
The adjudication team is typically divided up by industry specialization, or by deal size – or both if the firm is
large enough.

Credit Adjudicator
Adjudicators are absolute experts in credit and have a strong understanding of “ the 5 Cs of credit .“
Character Capacity Collateral Capital Conditions
Proficient with general At least 5 years of

Patient, deliberate,
financial acumen and credit experience with
and detail-oriented
modeling the firm
Extroverts may struggle with this type of role, even if they have sufficient credit acumen to do the job well, as
there is very little external interaction for an adjudicator.

A Day in the Life – Credit Adjudicator
The adjudicator role is not for everyone. After a big transaction gets approved, the risk manager closes that file
only to pick up the next in the queue.
Review Credit Transaction Client

Transactions Review Process Experience
• Target number of deals to review • Print off relevant files, including • This break in flow presents many
each day operating statements, financial challenges and affects the client
analysis, and supporting documents experience
• As few as 2 per day if they’re
working on large transactions • Cross reference the application • CFI’s CBCA Program is designed to
with the supporting due diligence ensure analysts have the tools to
• As many as 7-8 per day if they are items execute thoroughly and efficiently
working with small-business-sized
borrowers • The process is long and
challenging, particularly when
there is a lot of back and forth

A Day in the Life – Credit Adjudicator
The adjudicator role is not for everyone. After a big transaction gets approved, the risk manager closes that file
only to pick up the next in the queue.
Review Credit Transaction Client

Transactions Review Process Experience
• Target number of deals to review • Print off relevant files, including • This break in flow presents many
each day operating statements, financial challenges and affects the client
analysis, and supporting documents experience
• As few as 2 per day if they’re
working on large transactions • Cross reference the application • CFI’s CBCA Program is designed to
with the supporting due diligence ensure analysts have the tools to
• As many as 7-8 per day if they are items execute thoroughly and efficiently
working with small-business-sized
borrowers • The process is long and
challenging, particularly when
there is a lot of back and forth

Fulfillment Officer
The title “fulfillment officer” is a term for those who produce documents and advance credit transactions.
Credit Analyst Adjudicator Credit Administrator
Credit Associate
VP Commercial
Workout Banker

Fulfillment Officer
The process can vary depending on the nature of the client and the specifics of the transaction.
Existing Client New Borrower
Work in conjunction with the bank’s counsel to produce security agreements for the relationship team.
Ensure that all documents are in order prior to advancing funds, then advance according to specific instructions.
A single fulfillment officer may oversee the advance of tens of millions of dollars in credit in a single day.

Fulfillment Officer
These back-office roles typically do not require advanced credit analysis skills.
Must be well organized Relatively junior in their

Strong understanding of
to keep transactions career, looking to move
collateral security
funding on time into an associate role
While these types of roles are not glamourous, they are a great way to get into financial services and see how a
large commercial bank operates.

A Day in the Life - Fulfillment Officer
The back office will frequently run multiple shifts in order to accommodate a full business day across multiple
time zones.
Transaction closings May spend their entire

must occur on workday coordinating
schedule the day’s advances
Fulfillment positions do not provide a lot of flexibility around work hours, especially in comparison to a
relationship manager.

Summary
Career Overlap
Commercial banking is an attractive area to build a career because it is an integral part of many financial
institutions’ enterprise growth strategies.
Retail Banking
Capital Markets &

Wealth Management Commercial Banking
Investment Banking

Career Overlap
In some ways, commercial banking sort of sits in the middle of the other three, if you consider it strategically.
1 2 3
Business Owners and Employees that work at a Commercial borrowers

executives are the exact commercial borrower's can also generate great
target market of most place of business are opportunities for a banks
financial institutions’ retail prospects for their capital markets and
wealth management and banking needs. investment banking teams
private banking groups
Commercial banking is a terrific place to make a career in financial services, with great opportunities for exposure
to interesting businesses and their brilliant management teams.

Other Career Paths
There are a number of other interesting career opportunities for seasoned lending professionals with strong
credit acumen.
Equipment Asset-based Subordinated Private Real Tech Lending like

Fintech
Finance Firms Lending Debt Funds Estate Lending Venture Debt
The opportunities that a strong background in commercial banking and credit can offer you in the world of
financial services are abundant.

Conclusion
Course Objectives
Discuss what a commercial bank does Look at different roles in commercial Provide guidance and insight around
banking some potential career paths
Help you identify the best possible Make sure you better understand how
role-fits based on experience, technical the different roles work – and work
skills, and personality types together – in order to help you prepare
for the commercial banking recruiting
and interview process

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Careers in Commercial Banking

Corporate Finance Institute®

Business Commercial Corporate

<$5MM Revenue Focus of this course $100MM+ Revenue

<$2MM Borrowing $50MM+ Senior Borrowing

Owner-Operated Publicly traded

Simple Credit Structures Complex Credit Structures

Corporate Finance Institute®

Corporate Finance Institute®

Corporate Finance Institute®

Corporate Finance Institute®

Requires expertise in many industries

Corporate Finance Institute®

Supports day-to-day Acquisition of longer-term

Includes overdraft facilities Execution of longer-term

Specialized short-term Operating Credit Term Financing Acquisition of another

Corporate Finance Institute®

Includes overdraft facilities

Specialized short-term Operating Credit Term Financing Commercial Mortgages

Corporate Finance Institute®

• Checking or savings • Facilitates movement • Interest income is a

Corporate Finance Institute®

Commercial Banking & Credit

Corporate Finance Institute®

Relationship Team Middle Office Back Office

Relationship Manager Workout Banker Fulfillment Officer

Credit Analyst Adjudicator

Corporate Finance Institute®

Relationship Team Middle Office Back Office

Relationship Manager Workout Banker Fulfillment Officer

Credit Analyst Adjudicator

Corporate Finance Institute®

Corporate Finance Institute®

Corporate Finance Institute®

Corporate Finance Institute®

Same in Most Parts of the World

Commercial Relationship Account

Differs Depending on Market

Corporate Finance Institute®

The relationship team is the front

1 understanding their client’s needs as well as

Corporate Finance Institute®

Relationship Team Middle Office Back Office

Relationship Manager Workout Banker Fulfillment Officer

Credit Analyst Adjudicator

Corporate Finance Institute®

Assigned a book of Responsible for

• Senior Relationship Manager

Corporate Finance Institute®

Strong credit 3- 5 years of Terrific negotiation Juggling multiple

Corporate Finance Institute®

Morning Non-funding Off-site

• RM needs to inform the client if

Corporate Finance Institute®

Relationship Team Middle Office Back Office

Relationship Manager Workout Banker Fulfillment Officer

Credit Analyst Adjudicator

Corporate Finance Institute®

Facilitating large Ordering cheques Client’s first point Responsible for

Corporate Finance Institute®

Learn how to prioritize Make each client feel

Corporate Finance Institute®

Email and Market Time on the