Careers in Commercial Banking Flashcards
(44 cards)
Commercial Banking’s target market
> $5MM,
Purpose of Commercial Borrowing
Tech Companies Ag Enterprises Manufacturers Retailers Wholesalers Restaurants Professional Services Firms Medical Professionals
Credit Facility
A loan from an institution to a borrower
Functions of a Commercial Bank
Hold Money
- deposits, long term or operating
- treasury functions
Move Money
-ACH, Wires, online payments/credit cards
Lend Money
- to generate interest income
- to retain customers
The purpose of a commercial bank
To analyze credit risk and underwrite commercial credit facilities
7 roles of commercial banking
Relationship Manager (loan officer) Credit Analyst Credit Associate VP Commercial (director) Workout Banker Adjudicator (credit management/approval) Fulfillment Officer
Relationship Team Members
Relationship Manager (loan officer) Credit Analyst Credit Associate VP Commercial (director) Workout Banker
Middle Office Team Members
Workout Banker
Adjudicator (credit management/approval)
Back Office
Fulfillment officer
Responsibilities of the Relationship Team
Underwiring client needs and understanding/communicating bank guidelines and policies to the client and their finance team
Deliver strong growth and positive financial results
Skills of the Relationship Team
Strong credit acumen Sales ability Quality Service Negotiation Communication Underwriting
Two Step Relationship Manager (loan officer) start
1) Assigned a book of commercial clients. goal to extend further credit or support, optimize cash collections and disbursements, and offer complimentary service
2) Responsible for growth of that book.
- cold calls/networking
- building a referral network of lawyers, accountants, or brokers to funnel opportunity
Relationship Manager Skills
Strong Credit Acumen
3-5 years supporting commercial roles
Terrific negotiation and people skills
Multitasking
The morning of a Relationship Manager
Reviewing the morning overdraft report to ensure understanding and resolution of overdrafts caused by the clearinghouse or other factors.
Non-funding days of the Relationship Manager
Take clients out to lunch to thank them for their business and dine with influencers such as accountants, lawyers, and brokers
Off-site engagements for Relationship Managers
Check up on equipment and collateral, attend networking events, and host/attend sporting events
Skills of a Credit Associate
Multitask Manage time effectively Prioritize Make each client feel like they're the Bank's top priority Patient Proactive Great listener
Responsibilities of a Credit Associate
Facilitate large payments for the clients
Order Checks/resolve credit card problems
First Point of contact for day-to-day client needs
Responsible for onboarding new clients
What do Credit Associates typically lack?
Institutional knowledge and credit experience required to work as a relationship manager
Morning of a Credit Associate
Take calls on behalf of the relationship manager
Set up profiles and accounts for new clients
Credit Associate’s Market Intelligence factors
Rate changes
Tech developments and their potential interaction with clients
New products or service offerings
Schedule client pricing reviews
Responsibilities of a Credit Analyst
Support the transaction structuring process for new and existing clients
Work with existing clients to gather reporting and monitor covenants
Review industry specific policies and institutional guidelines relevant to each deal
Skills of a Credit Analyst
Strong understanding of accounting principles and financial acumen
Strong grasp of the economy
Reflective, knowledgeable, curious
Have an eye for detail
What are the two types of Credit Analysts?
1) junior staff. To learn the bank’s systems and processes. Usually fresh out of school
2) tenured commercial banking professionals. They do not want the lifestyle or targets tied to being a relationship manager.
