Commercial Banking

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Commercial Banking

• Theresa Carr Utopia High School

Reach For Your Horizon
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Commercial Banking Overview

• Commercial banks provide banking services to
  individuals, small businesses and large
  organizations
• More people are employed in the commercial
  banking sector than any other part of the
  financial services industry

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Commercial Banking Trends

• For decades, banks profited by simply holding
  customers' money and charging check-writing fees
  and interest on loans

• Jobs were well defined and
• stable
• The paths to promotion were
• clear and secure

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Commercial Banking Trends

• Consolidation, competition, and technological
  change forced layoffs while creating opportunity

• Since 1995, more than 200 large and small banks
  have merged

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Commercial Banking Trends

• Today, a handful of recently consolidated
  giantsCitigroup, Bank of America, JP Morgan
  Chasedominate the banking industry

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Skills Talents

• Broad business understanding and people skills
  are needed
• Accounting and writing skills are crucial
• High grades less important than work ethic

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Banking is Satisfying

• In 1992, Money magazine surveyed 100 jobs in the
  United States
• The job of banker was listed as the second most
  satisfying
• Bankers love their jobs!

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The Future is in New Areas

• Because traditional banking is in decline the
  future of the industry lies in services and new
  areas
• Many banks are now starting to compete against
  investment banks

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Specialized Banks are Doing Best

• Banks which specialize in a niche such a retail
  lending or global retail are doing better than
  more diversified banks

• Expect focused banks to continue to succeed and
  create more jobs

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You May be Traveling

• New regulations permit interstate banking
• Historically, you might not have been asked to
  travel much as a banker or deal with businesses
  in other states
• That is changing rapidly

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Middle-Managers Are In Demand

• The shake-up in banking has left a shortage of
  good middle-managers
• Other hot areas include loan review officers,
  technology specialists and auditors

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Jobs

• Jobs at different commercial banks vary according
  to the scope of their operations
• Mega-banks offer a variety of positions, from
  hard-core programming spots to investment banking
  and trading
• Small and regional banks tend to have a smaller
  range of more traditional positions
• Loan officer
• Teller
• Credit analyst, etc.

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Getting Hired

• Many roads lead into the commercial banking world
• At the bottom end, local branches hire for a
  number of different positions
• At the corporate level, the large banks hire
  hundreds of people from college and graduate
  programs each year

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Loan Officer

• Many bank executives start in this job
• Loan officers determine, based on the bank's
  criteria, who gets loans and who does not

• Must have people skills
• Salary range 35,000 to 90,000

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Branch Manager

• This is a great way to learn the industry
• Salary range 40,000 to 85,000

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Bank Teller

• The front line in the banking world
• Extensive customer contact
• Tellers must have a good feel for numbers, a
  willingness to handle large amounts of cash, and
  an attention to detail
• There are more than 500,000 tellers in the United
  States most work 9 to 5, and one-third work
  part-time
• Salary range 18,000 to 40,000

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Programmer

• Citibank boasts that it has more software
  programmers than Microsoft does
• Responsibilities range from managing network
  systems to coding applications
• Salary range 35,000 to 150,000

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Sales

• An understanding of product development and
  investments
• An undergraduate degree in finance, business, or
  economics gets you in the door
• An MBA gets you a second interview
• Salary range 30,000 to 100,000

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Trust Officer

• The job involves helping clients with trust
  services, estate planning, taxes, investing, and
  probate law
• This job requires diplomacy and tact
• Salary range 48,000 to 75,000

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Other jobs in banking involve

• Accounting
• Marketing and advertising
• Commercial card operations
• Securities transfer
• Wire operations
• Private banking

• Cash management services
• Installment loans
• Loan servicing
• Correspondent banking
• Personnel
• Operations
• Communications

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Major Players
Top 10 Banks, by 2004 Revenue Top 10 Banks, by 2004 Revenue Top 10 Banks, by 2004 Revenue Top 10 Banks, by 2004 Revenue
Rank Bank Revenue (M) 1-Yr. Change () Employees
1 Citigroup Inc. 108,276 14.3 294,000
2 Bank of America Corp. 65,447 33.5 175,742
3 J.P. Morgan Chase Co. 56,931 28.3 160,968
4 Wells Fargo Co. 33,876 6.5 140,500
5 Wachovia Corp. 28,067 14.7 96,030
6 Washington Mutual 15,962 11.4 52,579
7 U.S. Bancorp 14,706 0.9 48,831
8 MBNA Corp. 12,327 12 28,000
9 National City Corp. 10,600 10.1 33,331
10 SunTrust Banks 7,823 10.6 33,156
2003 numbers. Sources Hoover's Fortune 500 WetFeet analysis. 2003 numbers. Sources Hoover's Fortune 500 WetFeet analysis. 2003 numbers. Sources Hoover's Fortune 500 WetFeet analysis. 2003 numbers. Sources Hoover's Fortune 500 WetFeet analysis. 2003 numbers. Sources Hoover's Fortune 500 WetFeet analysis.

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What's Great about Banking

• Pay, portability, and promotions
• Commercial banks increasingly have to match Wall
  Street salaries
• You'll pick up skills that you can easily take
  with you to other jobs in finance
• An MBA is helpful but not a prerequisite to
  future success

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And Some More Positives

• Your degree doesn't have to be a highly
  prestigious one
• Most banks aren't high-stress, difficult places
  to work
• And it's not against the rules to be nice to your
  colleagues

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The Downside

• Fewer jobs and more uncertainty
• Brokerages and virtually every other type of
  financial institution are on a unstated
  missionto make the banking jobs obsolete
• Bank on Longer Hours

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High School Classes for a Commercial
Banking Career

• Career Financial Management ½ year ½ credit
• 
  1 year 1 credit
• Keyboarding/Word Processing 1 year 1 credit
• Accounting 1 1 year 1 credit
• Advanced Accounting 1 year 1 credit
• Business Law 1 year 1 credit
• Business Statistics ½ year ½ credit
• Financial Decision Making ½ year ½ credit
• Marketing Management 1 year 1 credit
• International Business ½ year ½ credit

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Employers in our area

• Bank One
• Bank of America
• Chase
• Citibank
• HSBC
• UBS

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Four-year Colleges Bachelors Degree in
Business

• College of Saint Rose
• Rensselaer Polytechnic Institute
• Sage Colleges
• Siena College
• Skidmore College
• SUNY at Albany
• Union College

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Two-year Colleges Associate's Degree in
Business

• Adirondack Community College
• Columbia-Greene Community College
• Hudson Valley Community College
• Schenectady County Community College

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Links and Resources

• Career Information, Company Profiles and Contacts
  
• Careers for Financial Mavens Other Money Movers
  
• By Marjorie Eberts and Margaret Gisler, NTC
  Publishing Group, October 1998. A good overview
  of career possibilities for those with an
  interest in banking.
• ABA Directory
• American Bankers Association, [phone],
  Lists banks around the country.
• Careers in Banking and Finance How to Achieve
  Your Professional Goals. American Institute of
  Banking-California, [phone]. Describes
  many jobs in banking and their prerequisites.
• Careers in Finance
• By Trudy Ring, VGM Career Horizons,
  Lincolnwood, IL., 1999. This book has an
  extensive section which talks about what work in
  banking is like and what types of people enjoy
  banking.
• Careers in Mortgage Banking
• By Mortgage Bankers Association of America. In
  the Business and Finance Career Directory, 1993,
  Gale Research, p. 77-79. (800)-877- GALE. Cost
  18.

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Links and Resources

• Career Information, Company Profiles and Contacts
  
• DDJ Myers
• Executive search consultants in banking with a
  focus on asset- liability management, investment
  analytics and portfolio management.
• How to Get Ahead in Accounting, Finance and
  Banking
• From Robert Half International. Order a free
  copy of this informative brochure online or call
  the corporate office at
• [phone].
• Resumes for Banking and Financial Careers
• By the Editors of VGM Career Horizons,
  Lincolnwood, IL, 1994,
• 1-800-323-4900. Has sample cover letters and
  resumes appropriate for applying for a job in
  banking.
• What About Banking?
• American Bankers Association, [phone].
  Discusses career options in banking,
  qualifications and salaries.

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Links and Resources

• Organizations
• American Banking Association
• Largest association of bankers in the United
  States. Holds a cool conference in Hawaii or
  some exotic place every year. A powerhouse on
  Capitol Hill and a publisher of a variety of
  career materials.
• Bank Administration Institute
• The BAI is a leading sponsor of professional
  education in banking. Check out their website to
  catch up with current issues and questions in
  banking. You might also look into their widely
  read magazine called Banking Strategies.
• Robert Morris Associates
• RMA is also the only financial services trade
  association that specializes in lending and
  credit risk information, research, and training.
  More than 3,000 commercial banks, thrifts, and
  other financial firms are members of RMA,
  represented in the Association by some 18,000
  financial professionals (called Associates) in
  50 states, Puerto Rico, Canada and numerous
  foreign cities including Hong Kong and
  Singapore.

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Links and Resources

• Ideas and Know-How
• The Death of the Banker The Decline and Fall of
  the Great Financial Dynasties and the Triumph of
  the Small Investor
• By Ron Chernow.
• A thought-provoking book that explains why the
  world of banking works the way it does today.
  Power has migrated from the bankers to the
  customers.
• Commercial Bank Management
• By Peter S. Rose. 1998.
• A classic text on banking. Covers the business,
  legal issues, asset-liability management and the
  future.
• First Manhattan Consulting Group
• This consulting organization shares a lot of
  their ideas about banking online. A good
  resource and not a bad place to look for a job
  either!
• Wharton Financial Institutions Center
• An excellent place to read up on academic
  research on banking. The Wharton Center sponsors
  an good set of online working papers and other
  materials on banking.
• WWW Virtual Library Finance
• An online compendium of web sites of interest
  to students and those who follow finance.

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Links and Resources

• Magazines and Newspapers
• American Banker
• This magazine carries lists of the largest
  banks, thrifts etc. in the United States. Good
  coverage of industry as well. [phone].
• Economist
• Widely read weekly covers world of banking,
  politics and art quite well. You have to read
  this if you plan to go into the field.
• New York Times
• Sunday classified section in New York edition
  is renown for listing ads by investment banks
  looking for talent. Cost 1.25 at newsstands.
  Also look at the Financial Times and CareerPath
• Wall Street Journal
• The most widely read business periodical in the
  world. And it's on the net! You must register
  for the net version. Great way to keep up with
  what's going on in the markets and the world.
  Following tombstones and ads is also a good way
  to see which banks are involved in what types of
  activity this year. You may also be interested in
  Careers.wsj.com