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Interview with: Big 5 Commercial Banking New Grad – Getting In, Training & Orientation, The Role

How many commercial banking new grads are hired every year by the Canadian banks?

In short, it varies. I know that CIBC and TD hire under 10 people per year. But on average, about 10 – 15 people per year. However, there is some occasional year-round/off-cycle hiring when someone quits/get promoted, and the bank doesn’t have an internal candidate. Of course, the preference is to hire internally as it is an effective carrot for those who stay within the institution.

What are the different commercial banking new grad programs/new grad rotational programs?

Within Commercial Banking, there are different several programs that exist. All banks will usually have the standard rotational program that prepare grads for either senior analyst (covering mid-market or national accounts clients) or junior account manager roles. It can also happen that grads will end up staying in the specialized product teams such as liquidity cash management, trade and receivable financing, capital lease financing, or foreign exchange (FX) origination teams.

However, bigger banks would also have specialized product programs within trade finance and cash management teams where grads will rotate in front, middle and back office teams to become well versed in different aspects of their respective products. But the general program probably provides the best post-program flexibility as you can still go in specialized teams, but you can also become the owner of relationships/portfolio as an account manager.

Additionally, it allows for the widest selection of teams for rotations, which likely provides the best holistic understanding of commercial banking as a business and all front office teams (subjective statement). Within the standard commercial banking program, you normally start with a front-line commercial banking team supporting an account manager with credit underwriting, portfolio due diligence, compliance and audit requirements, client prospecting and minor participation in facilities structuring and client meetings shadowing.

The second and third rotations are typically spent in credit, or product teams. Usually, there are only one or two spots available in each team for rotations, so there might be a little competition among grads to get in more desired teams for rotations like syndications team, special credit (high leverage/insolvent clients), and private sponsors group (clients owned by private equity firms). Frequently, a lot of “more wanted” teams are in Toronto, so hires there have a slight advantage as networking to those with team becomes more attainable.

What kind of training do Canadian commercial banks provide?

The formal component training length varies from two weeks (CIBC and Scotiabank) up to a month (HSBC) with international banks having a more structured (and longer) programs. Frankly, the initial formal training is highly generic and is somewhat irrelevant to the actual role as its usually conducted by third party representatives such as Moody’s (rating agencies) instead of the actual bankers.

The credit training provided is very generic and appears to be tailored towards grads with non-business background. The topics covered are basic accounting and financial statements analysis, covenant calculations, credit ratings, and relationship management. The most useful training starts with the on-the-job training as you start being coached by other analysts and account managers. That training and its quality is really a subject of how experienced/good and willing to teach the account manager is.

Is there orientation week for commercial banking entry level hires?

Canadian banks fly their grads to head offices in Toronto for two weeks of training.

Many commercial banks from the US such as Wells Fargo, JP Morgan and Bank of America have a commercial banking operation or mid-market operation in Canada. Their training is usually in the U.S.

International banks have an orientation week where the banks fly all grads to the global headquarters in London. They spend the entire week attending networking events with other hires across the globe, and global leaders. It’s then followed by weeks of formal training in Toronto. This is similar to what DBS and other major Asian banks do in order to better integrate new hires into an international platform but with a domestic focus.

What are day-to-day tasks for a commercial banking new hire?

It really varies on the rotation, but the role primarily involves supporting the respective account manager or product manager.

It involves taking care of all the internal documentation and reporting, underwriting credit reports for credit department’s approvals, assisting a manager in structuring products for deals by carrying out the respective analysis, ensuring that the required due diligence is completed as per lending manuals and guidelines, maintain the quality of the portfolio via daily, monthly, quarterly, and yearly reviews of clients’ performance and compliance, and corresponding with clients (usually with respect to monthly, quarterly and yearly reporting for monitoring purposes).

There are also a lot of activities evolving around ever-changing procedural requirements that must be conducted on the interval basis that analyst would usually take care of. The participation on client calls, meetings and site visits varies depending on the “style” of the account manager; however, usually the hire would get gradually involved within the first several months.

What is a normal day for the account manager/portfolio manager/relationship manager in commercial banking?

The account manager (relationship owner) is sales and relationship management focused. Account manager’s role evolves around managing the sounds relationship with clients within the assigned portfolio and representing their interest in the bank to maximize the lending and auxiliary based revenue.

Account manager spends a portion of the time keeping a close correspondence with existing clients while seeking out the opportunities to increase the share of the existing wallet with them. Attending networking and industry events to source potential new clients would also represent a chunk of time, especially in the first half of the fiscal year. Account manager is also a person that is expected to have the best understanding of the given client and their needs, so the level of involvement in structuring products, terms, and the respective collateral is high.

The account managers would also spend a small portion of time reviewing analysts’ credit reports and providing comments because the ultimate responsibility of pushing the credit through the credit department sits with them. Account managers lead the entire process starting with having conversations regarding a new facility or limit increase and ending with the funding process when the back office takes over (yet account manager is expected to stay involved).

They are also responsible for recognizing the opportunities for cash management and trade products and engaging their product partners. Recently, account managers also got increasingly involved in ever growing compliance requirements.

How big are the books for the commercial banking relationship managers and how are clients segregated?

Each bank does segregation between clients differently. Big five would break it down by the exposure size: business banking (small business loans between .5 – 5M), mid-market/corporates (facilities of 5M and up to clients requiring syndicated facilities), and national accounts (syndicated deals, and private sponsors clients).

In international banks, it’s roughly segregated by client’s revenue: business banking (top line up to 40M), mid-market clients (40M up to 500M revenue) and large corporates (500M up revenue). However, the truth is that discrepancies to the provided breakdown are quite common; there will be account managers with mostly mid-market clients which will manage several large corporate accounts, and a few business banking clients.

If an account manager supported a given company for several high growth years and they technically grew into a different segment, they will still stay with that account manager. Of course, there are cases when the company’s needs change so drastically that they need something different altogether.

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