by Girl Banker Listen to the iTunes podcast instead. As an eager banker-wannabe whenever I heard the term "back-office" I imagined a category of overworked and underpaid workers toiling away in a windowless room at the back of a building! Personally, I find the term a little derogatory. In banking, the terms: back, middle and front office refer to how closely connected you are to the money train. Front office Front office workers make the money. Their actions lead directly to more or less money being added to the bottom line of the bank. Front office workers will earn the highest bonuses because they essentially make the money and as such expect a higher cut. In theory, the more money you earn for the bank, the higher your expected bonus is. In a recession, bonus expectations will be lower overall but front office workers will still expect more than those further down the chain. Front office does not have to be client-facing e.g. traders usually do not see clients but if you are client-facing you will need to look smart and dress well for meetings. If you hate suits, this is not the best job for you! Front office includes:
Middle office Middle office workers are an integral part of making money. They directly support a deal but their actions have to be instigated by a front-office worker. A middle office worker cannot as a result of their own actions increase bank profits. Middle office includes:
Back office Back office includes any process-orientated roles. An efficient back office is vital because if clients don't get statements and confirmations on time they will hate your bank and could, on that basis, exclude your bank from deals. How can back office impact front office deals? Imagine you work on a company's small corporate finance team; you have ten bank relationships to manage. One bank consistently sends statements late. The statements frequently have errors and you have to call many times to get issues sorted - if it can be helped you're going to avoid doing business with that bank, aren't you? Back office includes:
So there you have it. When you're applying for jobs it can be a little challenging to decipher whether a role is front-office or not. This is especially true if you're applying off-cycle to a bank that has both a retail bank and an investment bank. Use the above guidelines to help you decide how close you are to the money train. You want to get as close as possible.
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by Girl Banker Listen to the iTunes podcast instead. This is a possible investment banking interview question. Many investment banks are composed of two key divisions: 1. Corporate Finance. Frequently referred to as the (Classic) Investment Banking Division or simply (Classic) IBD in many banks. 2. Debt and Equity Capital Markets. This frequently includes Sales, Trading and Research functions. Many investment banks now also have large asset management divisions including private wealth management; however, this book focuses only on corporate finance and capital markets. The term ‘investment banking’ is sometimes used as a catch-all phrase for both corporate finance and the capital markets (sales and trading jobs) i.e. in referring to the industry as a whole or it could refer to the corporate finance division within an investment bank.
This is the quick answer. You can expand upon it by adding: Investment Banking 101 What is corporate finance or the investment banking division (IBD)? What are the capital markets/what is sales and trading? What is the difference between an investment bank and a commercial bank? by Girl Banker® Listen to the iTunes podcast instead. In Sep-2006, as a second-year Goldman analyst one of my Associates text me to ‘show-off’ that he had just passed level 3 of the Chartered Financial Analyst program, CFA. I was kind of jealous! I knew it was a definite plus on his CV because I’d heard that it was extremely challenging. I thought, ‘If he has the time to study for the CFA, I can make time too!’ It was September already but I still applied for the Dec-2006 Level 1 exam. I passed. I passed the next two levels in Jun-2007 and Jun-2008 respectively. What is on the CFA curriculum? There is a little bit of everything finance-related. The beauty of Level 1 is that it is very broad, immensely interesting and really not that difficult. It was through Level 1 I developed an interest in derivatives. I started trying to move from IBD to the capital markets a few months after I completed the exam– the better working hours were also a huge lure for me. Level 2 is generally accepted to be the hardest level. It was, for me, also the most boring. There is so much nitty gritty detail on accounting – not my favourite topic. Level 3 is very focused towards asset/portfolio management. There is lots of in depth information about how to look at asset portfolios, how to choose between different asset classes and how to manage other people’s money. HOW COULD THE CFA HELP YOU? 1. It will stand out on your résumé/CV The CFA qualification is well regarded because its modules are highly relevant to different areas of banking and because CFA Institute only allows the best 35-45% to pass any sitting. 2. Your chances of getting invited to interviews may rise Case in point: one of my colleagues did his first degree in Lebanon followed by a Master’s degree at a good UK university. When it came to looking for a job, he says he didn’t get a single response after sending out his résumé/CV so he decided to sign up for CFA Level 1. When he sent his résumé/CV out again he started getting interview invitations. He’s one of the best derivative salespeople I know so it just goes to show that banks can have trouble sifting through the many applications. 3. It may help you to decide where in an investment bank you would best fit Some bankers think the CFA qualification looks a lot better if you did it whilst you were working rather than when you were in university or looking for a job; however, I would argue that it adds a lot of value to your résumé/CV no matter when you do it. It’s not easy. 4. Your chances of ever becoming unemployed (apparently) fall Of the 100,000 current full CFA Charterholders globally (i.e. people who completed and passed CFA exams 1, 2 and 3) and according to the CFA Institute’s own figures only 4% of them are unemployed at any time. You can read a full piece on this on eFinancialCareers. DO YOU HAVE TO TAKE A TAUGHT COURSE TO PASS THE CFA? I didn’t and I still passed all 3 levels the first time. For me, paying someone to teach me would have been a big waste of dosh. When I am around other people I usually want to chat. For the same reason, I also didn’t join any study groups. What was my strategy? Time was limited. I didn’t read the CFA’s own materials, they’re too thick. I ordered self-study materials (five books, Audio CDs, QuickSheets and Practice exams) from Schweser. I studied properly on weekends (both days); during the week I listened to the audio CDs on my way into work. I was always too tired to do any revision after work. I took exactly one week off prior to each exam. By this time, I had been through all the study material once. Each time, I created a schedule to ensure this was the case. So what did I do in this one week? Exam practice! One exam per day. As I went through the practice exams, the areas I needed to work on jumped out at me, so I re-read just these modules. What about my social life? What social life? I killed it. I went out to dinner like a couple of times per month. However, when the CFA was over ‘freedom’ felt so much sweeter. I wrote the last exam in Jun-2008 but even today, four years later, the idea of combining a full-time job with the CFA still gives me the hibby jibbies. by Girl Banker® Listen to the iTunes podcast instead. Simple answer: university. I get asked this question time and time again by prospective investment bankers. Should I choose this university or this other one? I know this university is lower in the league tables but the course that I have been accepted onto is more closely related to finance - that will make my chances of getting into an investment bank higher, right? As I have mentioned before, investment banking is not a vocational career: you do not need to study finance in order to get into i-banking. Why? Because whatever desk you land on in an investment bank, the required knowledge will be so specific and so practical that your university will not have covered all or most of it. Importantly, it is all stuff that can be quickly learnt on the job. Certainly within about 18 months you can go from knowing nothing about finance to being very proficient. Indeed, you can graduate with a finance-related degree and still struggle to learn all the on-the-job stuff. People who have come from a non-finance background frequently over-compensate with weekend work and post work-hours reading. Whatever your degree, even if it's finance-related, you should be doing extra reading after work (that is, if you get home at a 'decent' hour) and during weekends. Why does the university matter so much? Investment bankers ultimately want to hire the smartest people that they can. It impresses clients and the quality of work produced by smart people is higher. Like it or not, the university system is seen as a sorting ground: the crème de la crème get into the best universities. This is why investment banks tend to have hiring programs at the top universities and nothing at the lower tier ones. If, unfortunately, you didn't manage to get into the best universities do not despair. Apply directly to investment banks and differentiate yourself with your extra curricular activities. Any questions? by Girl Banker® Listen to the iTunes podcast instead. What, you googled me? I was aghast when a fellow intern went home and googled everyone he wanted to know more about. Armed with that knowledge, he came to day 2 of a training session asking personal questions. When he started asking me stuff about my family I felt violated; that was 2004. Today, you should expect to be googled by your employer. Information is power and the more an employer can find out about you the better equipped they are to determine whether or not you fit in with the investment bank’s culture. Your silly tweets could be the reason no one is inviting you for an interview. It may well have been funny when you were sharing it but it’s going to be a lot less humorous when all your friends are hooked up with a cushy job and you’re not. The headline test – before you post anything think: “Would I be proud to see this shared on the front cover of The Wall Street Journal or The Financial Times?
Anger backtrack – if you’re angry, annoyed or irritated do not tweet, blog or post anything. Feel free to rant and rave about it in your personal word processor but leave it be until you are not angry and you’ll find that it was going to be one of those posts you later regretted. De-connect – if you tweet a lot of random stuff, do not connect your twitter to your LinkedIn. You know employers and headhunters officially trawl LinkedIn profiles to find out stuff, right? Close up – so you’re mr or ms popular: you’re the entertainment organizer at your school or university. Good for you, but that doesn’t mean you need to have an open Facebook profile. If people are actually interested in what you have to say they will friend you or subscribe to your public tweets. Go through your personal info and carefully select what is viewable by the public. It should only be stuff that adds positive value to your employability. Choose your friends carefully – Facebook didn’t always have the subscription button so people used to accept friends willy nilly. Personally, I don’t friend anyone that I don’t actually know. Decide what criteria people need to satisfy to be your “friend” on Facebook and only friend those. Everyone else can subscribe to your public posts. The funny test – the biggest temptation is to share stuff that makes us laugh. Once you’ve had a good laugh you always want to share. Making people laugh makes them like us and everyone loves to be liked. Unfortunately, a lot of funny stuff is funny because it’s taking a stab at a certain segment of society. Before you share funny stuff, think about whether it makes you look like a misogynist, a racist, a homophobe, a pervert or whether it is persecuting a given religious group. I know a guy who had a nice job that he could have stayed in for years but ended up having to resign because he was sharing inappropriate material. Pseudonym – you don’t have to use your real name. Even if you use a real photo of yourself if you create a pseudonym you’re going to be hard to find with google searches. If you’re working under an alias you have a lot more leeway in terms of what you tweet and share, however, keep in mind that someone in the ‘inner circle’ could betray your confidence. Social networking is fun but we all get carried away sometimes and forget just how public cyberspace is. I am not that personal a person and I am happy to share a reasonable amount but I am extremely careful with what I post. Nonetheless I have experienced tweeter’s remorse and by the time I do, it’s already hit my LinkedIn and my Facebook because they are all connected. I not only have to delete the tweet but I have to rush and delete in all those other places also. If the post has already been shared by friends, it’s a losing battle. Be wise to your social network. by Girl Banker To Become an Investment Banker is now available for sale on Amazon or off this website. All your questions on the application and interview process, possible interview questions and the dos and don'ts of banking have been fully answered in this book. Get your copy now. Please subscribe to receive info that will help you get into investment banking directly to your inbox AND you will get Chapter 1 of To Become an Investment Banker for FREE!
by Girl Banker®
Listen to the iTunes podcast instead. Good question. There are lots of investment banks out there. Some that you have heard of and some that you haven't. In To Become an Investment Banker, I take you through some criteria that you should look at in deciding where to apply:
Getting paid Working in an investment bank is hard work. If you manage to get into one of the top banks you will be working with some of the brightest people in the world. You need to justify your existence. The profitability of the transactions that you work on will form the basis of how much you get paid. The more deal flow your firm gets, the more likely you are to land on a good transaction. Building a fantastic résumé / CV The market value of an investment banker is based on the transactions they have worked on. The deals you work on determine a) your value inside your bank and b) your reputation and value outside the bank. The more deals you get to experience, the more valuable you become. Meeting people The more people you work with, the more you open yourself up to opportunities. Many deals involve several banks working together alongside lawyers and possibly accountants. All the people that you get exposed to help to build up your brand. The higher your firm's deal flow, the more opportunities you will have for 'branding' yourself.
Okay, so where is all the deal flow? In To Become an Investment Banker you will find a league table for the top 50 banks in All Corporate Bonds Issues in 2011. I chose this over the equity table (also in the book) because it included a much larger volume of deals.
You can find the same information below. For ease of navigation, I divided the list into 'Top 20' and 'Next 30' then ordered each list alphabetically. This list will be refreshed annually. You will find links that take you directly to the careers section of every investment bank here. Please subscribe to receive info that will help you get into investment banking directly to your inbox AND you will get Chapter 1 of To Become an Investment Banker for FREE!
by Girl Banker®
Listen to the iTunes podcast instead. If you want to maximize your chances of getting into investment banking the best time to apply is roughly eighteen months before you need the full-time job! Let me explain... You must do an investment banking internship the year before you graduate. In To Become an Investment Banker, I talk extensively about how you can go about finding yourself the perfect internship. The top investment banks have 8 to 12 week internship programs every summer. This internship is essentially, a long interview. At the end of that period they decide who in that pool of interns has what it takes to hack the world of investment banking. It makes sense because a much more informed decision can be made after observing someone for a few weeks than through a series of short interviews.
Those people that are chosen are offered a job to start the following year, when they actually graduate.
So, if you’re reading this already in your final year and thinking of getting into investment banking when you graduate in the summer, sorry, but most of those jobs are G.O.N.E. You might still get a job but you’re shooting for a smaller pool of spaces. The key here is to intern the year before you graduate; not two years before, not three years before - just the year before. To give you a real timeline:
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Girl Banker®I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Initially published at girlbanker.com, all posts were later subsumed into my personal website under katsonga.com/GirlBanker. With 7 years of front office i-banking experience from Goldman Sachs and HSBC, in both classic IBD (corporate finance) and Derivatives (DCM / FICC), the aim of GirlBanker.com was to make it as straight-forward as possible to get into a top tier investment bank. I'm also a CFA survivor having passed all three levels on the first attempt within 18 months - the shortest time possible. Categories
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