Corporate banking is an umbrella term for banking services used by corporations, separate from capital-raising, mergers advice or risk mitigation. It’s usually the workaday stuff of a corporate treasurer: Moving cash between thousands of separate accounts; handling foreign-currency transactions; financing short-term trade balances; and processing customer payments.
Those who work in corporate banking describe the work as extremely detail- and client-oriented. It's not the realm of "big ideas," as much as "big execution". Lack of creativity isn't penalized, but mistakes can be fatal.
Nearly all banks offer some form of corporate services, with the largest players -- such as Citigroup Inc., JPMorgan Chase & Co. and The Bank of New York Mellon Corp. -- handling the largest corporations, governments and non-profit institutions. The big banks also do corporate banking work for smaller businesses, but such accounts are often picked up by a host of regional banks.
While a number of big players in the space have disappeared, been acquired, or severely hobbled, this sector is a relatively safe harbor amid the turmoil in the financial sector.
WHERE THE ACTION IS
Economic upheaval has affected the corporate-banking business in two significant ways. First, it’s flushed out a number of players, such as Wachovia Corp. and National City Corp. It’s also forced a series of corporate reorganizations that is changing the nature of corporate banking. Citigroup, for instance, recently merged its corporate and investment banks into one unit in a bid to cut costs.
Second, the turmoil has also made corporations pay more attention to the functions they once regarded as humdrum back-office work. That was made clear in the 2008 scandals involving auction-rate securities. These securities were supposed to give holders a few extra points of yield on their corporate cash balances. But when the securities became hard to sell, a series of corporate treasurers lost their jobs. Similarly, the global credit crunch has made companies all the more cognizant of their need for reliable, easy-to-access to cash and other cash-management services.
Those realities mean that corporate banking has been relatively less affected compared to the likes of investment banking, trading, and stock and credit analysis. With fewer fancy bond and stock deals in the marketplace, the relatively thin-margined businesses in corporate banking look more attractive to bank bosses. Consider Citigroup, for instance, which posted a $23 billion loss on bad bond bets during 2008. During that same period, its transaction services posted net income of nearly $3 billion, double since 2006.
But that doesn't mean that there will be a lot of hiring there. Most banks are in a hiring freeze, which means that job-seekers who will fare best are those with a strong set of corporate contacts, who may be able to wrest new assignments from their old relationships. There is also a premium on those who know how to creatively tap markets to help clients raise money. In this market, there's always a job for someone who knows how to find the cash.
People who work in corporate banking have long suffered from envy of their more glamorous cousins in investment banking and trading. But those old rivalries are changing as pay tightens and job security becomes more of a status symbol.
Access to corporate banking jobs is less structured than the typical elite-college route taken in investment banking and trading. A number of top executives got their start working in back-office and clearing jobs, their knowledge of Wall Street's "guts" giving them a good background for advancement. Take, for instance, Citigroup's Neeraj Sahai, who heads Citi's Securities and Fund Services business. Sahai started as a management associate at Citi in 1984, working as a relationship and risk manager in corporate banking before ascending through the ranks.
While access to jobs may be easier, the basics still apply: Thoroughness is key, as is an analytical mind that’s adept at numbers and ways to creatively express them. Not all corporate bankers need be math whizzes. There’s plenty of room for those who are good salespeople, able to relate to top corporate executives, and help them navigate a bank’s various services and products.
Most bank executives would rather have one great salesperson than five solid "execution bankers." That presents a career path for a good salesperson in a different industry to make the jump to financial services -- provided he or she is financially adept.
GETTING THE JOB
Put the investment-banking envy aside. Those who sincerely want to be part of the corporate banking business will go far in interviews. Those who really wish to be a more-dashing investment banker should be careful about overstating their ambitions, especially in this jobs climate.
Similarly, developing an expertise in a seemingly arcane part of the banking-world -- be it Oracle’s enterprise cash-management system or PeopleSoft’s Enterprise Financial Management -- will work wonders for someone looking to fill a slot.
Another approach would be to work as an intern or young associate inside a corporate treasurer office -- a large or small company -- to help get a feel of the type of work.
Above all, be open to the kind of grunt work eschewed by others. It just may be your ticket into a big job that others might originally scorn, and then wish they had, too.