Commercial Banking Interview Questions
real examples of the most common questions ( and best answers ) used to hire in commercial bank .
Updated February 9, 2022
What are the Most Common Commercial Banking Interview Questions?
We ’ ve asked countless commercial trust account managers, relationship managers, and accredit analysts what the most coarse commercial bank interview questions are. Based on their responses and feedback, we ’ ve laid out the most probably questions to be asked in an interview with a lease coach .
We’ve organized the interview questions into two categories:
- Technical (finance and accounting)
- Behavioral (personality and relationships)
In this guidebook, we ’ ve besides provided what we believe are the best answers to these commercial bank interview questions. For other careers, please check out all our interview guides .
#1 Technical commercial banking interview questions:
How would you determine the creditworthiness of a company?
There are two main approaches : ( 1 ) assets, and ( 2 ) cash flow. A thorough approach path involves a fully fiscal analysis of the business based on its fiscal statements, market conditions, and the management team .
On the asset approach, it ’ randomness important to understand how much the assets are truly worth, how liquid they are, and how much you think you could get for them. On the cash stream approach, the historic ability to generate cash flow ( or final income, EBIT, EBITDA, etc. ) will be relied on, in junction with a realistic forecast to assess how a lot debt they can service .
To learn more, see CFI ’ south Loan Pricing course .
If you were asked to analyze a set of financial statements, what would you do?
The inaugural thing I would do is put them in a cleanse Excel workbook, or company template, in an organize format. future, I would calculate a assortment of ratios : profitableness, growth, margins, leverage, and fluidity ( see question below for specific examples ). last, I would analyze these ratios and identify trends ( based on at least 3 years of historical data ), which I would try to extrapolate into the future .
Learn more in our fiscal Analysis for Credit Course .
Name some important credit metrics
There is a wide-eyed range of credit metrics. A few of the most park ones include :
Leverage: debt to equity, debt to capital, debt to EBITDA, matter to coverage ratio ( or fixed commission coverage ratio ), and other variations of these ratios .
Liquidity: working capital, current proportion, agile ratio, cash ratio.
Read more: Top 4 for interview questions in 2022
Where do you think interest rates are headed?
You have to be careful with your answer to this commercial trust interview motion. Every depository financial institution has its own economist, and every economist typically has three different outlooks on interest rates ( up, down, and flat ). The key is to merely demonstrate that ( 1 ) you know what stream concern rates are, and ( 2 ) you can identify some intelligent scenarios that would cause them to either go up or down. Avoid making a accurate prediction, but show that you ’ rhenium informed .
For more on this, see our macroeconomic interview questions .
If you were given an income statement where revenue was going up and net income was going down, what would you think the problem is?
There could be many issues. The most probably explanation is that the ship’s company is fueling its tax income growth by ( 1 ) increasing its commercialize expenses ( see : return on ad spend ), ( 2 ) decreasing prices, ( 3 ) experiencing an increase in cost of goods sold, or ( 4 ) changing account policies, like no longer capitalizing an expense that used to be capitalized. The chief indicate is, more probe into the income statement is required, but it ’ sulfur frequently an indication that growth is being pursued in an uneconomical way ( although that ’ s not definitively the lawsuit ) .
What’s more important, the income statement, balance sheet, or cash flow statement?
This is kind of a whoremaster question, as all three statements are highly authoritative and you can ’ t actually get by with just one of them. The income argument is important to see what a company earns over time and what its operate on margins are like. The remainder sheet shows what a caller owns and what it owes. last, the cash stream statement shows how much actual cash the occupation is generating or consuming. All three are authoritative in concert. Learn how to connect the three fiscal statements .
#2 Behavioral commercial banking interview questions:
How do you manage risk in your personal life?
This is an opportunity to show you can think on your feet and apply the principles of risk management in a different way. There is no right or incorrectly answer. The key is to point out that there are respective ways to think about risk ( gamble of personnel casualty, the risk of missing out, risk vs. reward, and so forth ). You could talk about your finances, or you could even talk about personal activities .
What does it take to be a great commercial banker?
This is a wide-open commercial bank interview question. There are lots of ways to answer it ; the key is to think about the skillset required in commercial bank and tie your response to that. The independent two skills required are ( 1 ) analytics and ( 2 ) sales/relationship management .
More reading : how to be a good fiscal analyst .
Where do you see yourself in five years, if you’re hired?
This is a sensitive topic. It ’ s likely to be one of the commercial bank interview questions because so many people try to go into it as a stepping stone, trying to get into corporate finance or investing deposit, so it ’ mho crucial not to make them think you want to leave in a few years. You want to come across as ambitious, but not besides ambitious ( for example, don ’ t say “ in five years, I see myself in your speculate ” ).
Read more: Top 3 question that ask in interview in 2022
To manage a transition, check out our corporate finance courses .
Describe your approach to sales
You may or may not be asked a wonder along these lines, depending on what role you ’ re going for in commercial deposit. A distribute of commercial bank is sales-oriented, so it ’ randomness authoritative to be able to demonstrate you ’ ve got what it takes to thrive in a sales environment. There are many approaches to sales : relationship-based, need-based, value-based, etc., so this is a identical open-ended question .
More interview questions
Thanks for reading our commercial Banking Interview Questions and Answers guide. Check out our early interview guides and explore our interactional career map to advance your finance career :