OVERVIEW OF COMMERCIAL AND RETAIL BANKING
When most people refer to their ‘bank’, it is generally a reference to a commercial bank. Commercial Banking, also known as Business Banking, is a bank most commonly known to individual people as an institution which provides checking accounts, savings accounts, loan vehicles, and money market accounts. Commercial banks can deal with deposits and loans for individual people as well as from larger corporations and business', providing a broad range of savings programs and options to the customers. These institutions gear their efforts towards lending money to consumers rather than focusing on raising capital. They normally execute transactions directly with their clients or customers.
One main function of a commercial bank is that of processing payments in an account by means of physical transfer or through internet banking. Overdrafts, letters of credits ... More »
CORPORATE STRUCTURE & CAREER PATH
Commercial banks employ far more people than do any other companies in the financial industry 1 and according to an older study published in Money Magazine, these Bankers have more job satisfaction than any other career path surveyed 2. Commercial Bankers are still Bankers, but should not be confused with Investment Bankers, though the structure within the companies can be similar, their responsibilities differ drastically. Each commercial bank has a unique corporate structure and career path based on the size of the bank and the depth of the organizational hierarchy. Most companies bring students in as Interns, promote them to an Associate level, and depending on performance the Bankers will move into Vice President and Executive or Managing Director level. It should be noted that commercial banks often hire employees on an hourly basis rather than offering them salary positions.
Many employees start out as Tellers and mo ... More »
STRATEGIES IN COMMERCIAL AND RETAIL BANKING
One major strategy most commercial banks will demonstrate today are their actions taken in response to the lessons learned in the US sub-prime crisis. In light of the sub-prime calamity, banks have started to take more precaution when pricing loans, administering loans, and creating standards for risk management. It has been noted that their standards have tightened significantly in order to mitigate risks 7. For example, many people who would have easily been able to take a large mortgage out on a home will no longer qualify.
It has been found that banks that are more specialized have been performing better than more diversified banks in the economic meltdown 7. For this reason, large banking giants such as Citi, have begun to sell off any operations which are not deemed to be core to that companie's business. For example, Vikram Pandit (CEO of Citi) recently announced that they would be strategizing in this turbul ... More »
6.) University of Michigan "Office of Career Development Career Path: Investment Banking/ Private Wealth Management/Research/ Sales and Trading/ Financial Derivatives and Risk Management: Steps for Developing a Career in Securities; 4/13/2005 (Found on 7/18/2009)
8.) HT Syndication: Indo-Asian News Service "Pandit to Reveal Turnaround Strategy for Citigroup" May 9, 2008
Commercial banking is not famous for its generous salaries the way investment banking is, because commercial and retail banking is a margin business which puts a larger restriction on employee pay.
Current salary ranges for an Entry Level Trainee and Credit Analyst, fall within the $40,000 to $60,000 range and average around $48,000.
Junior Loan officers make an average close to $60,000 and Senior Loan Officers have ranged between $100,000 and $115,000.
Mortgage Originators are paid a bit less than other commercial banking roles, which is around $40,000 where as Financial Analysts have a wider range of salaries but average around $58,000.
Those with an MBA will range from $70,000 to $100,000 and those who have more than 5 years of experience will range from $80,000 to $120,000.
Education requirements are relatively stringent in commercial banking, a Bachelor’s Degree is required for an entry level trainee, Credit Analyst and Loan Officer 1. For some of the more advanced positions such as a Senior Corporate Loan Officer, Mortgage Originator, Financial Analyst, and Personal Banker, an MBA is highly preferred 3 and there is normally a minimum number of years of experience required 1.
Commonly asked Banking interview questions:
First, be SURE to have at least a handful of questions to ask the interviewer. This will show genuine interest in the company.