Laughing straight to the bank

“So, what exactly do you do?” is a question I get asked, a lot.

First thing’s first, let's get this right, not everybody who works in a bank is a banker.

Firstly, there’s front office (FO) vs. Back Office (BO):
No, this has nothing to do with where you sit like how back in school the naughty kids would sit at the back of the class…unless you were in my 11th grade English class where we were seated according to marks, the higher, the further back.

FO are the client facing guys, they are the revenue generators and interact directly with the clients - the Bankers and Traders.
BO are more of the support people, the record keepers who make sure that the engine is running smoothly - Finance (the accountants), IT, Risk, Compliance etc.
There are also the fence sitters who can't decide (OK, I kid) , the middle office, these are those who do a bit of both, they support FO as BO and may from time to time have some sort of client interaction - Researchers, Credit Analysts, Legal. 

Though everybody works harmoniously singing Kumbaya, there are also a lot of egos flying around, like FO people look down on BO people and within FO, the Investment Bankers are; how can I put this, the Kanye Wests of the bank!

Banking is so wide and varied that if I had to break it down in a detailed manner it would take roughly my whole life and most of you would stop reading halfway anyway so I'll stick to one particular division for now. Naturally it would be where I sit, Debt Capital Markets (DCM), which in my case, falls under Investment Banking (IB). 

Before I moved to DCM I struggled with getting the low down on this side of banking as most available info out there focuses on IB as most would know it - Project Finance/M&A/Advisory, which is all good and well except I'm not required to build models and I work, on average 60 hour weeks as opposed to 80 hours like some of my IB friends.

DCM in a nutshell:

As the name suggests, this division solely focuses on raising funds by means of issuing debt. The process goes more or less as follows:

1. Client issues a document called an RfP (Request for Proposal) - in which they basically state that they require a certain amount of funding to either pump into a new or existing project or pay off some other debt.

2. Banks then respond to the RfP in the form of the infamous pitchbook where they recommend the type of debt (loan/bond).

3. Client then mandates which banks they would like to work on the deal (can be one or multi, depending on deal size).

4. A whole lot of preps and emails and inter-bank meetings take place.

5. In the case of bonds - Investor meetings known as roadshows are set up - this is the bank's chance to sell the bond to various potential investors across the world. This usually takes place over 4-5 days meaning you could be in New York on Monday, LA on Tuesday, Frankfurt on Wednesday, London on Thursday. And by "you" I certainly don't mean me because only Associate Directors (AD) and up cover this part, Analysts & Associates however will help with the preps including investor profiles and timetables (so you're part of the action in some way lol).

6. The day comes to launch the bond, from the time the markets open, so does the orderbook. Think of is as an auction where investors are the bidders. Throughout the day you track the orderbook closely (because juniors are required to write up a deal review at the end of the day).

7. The book will finally close at a time agreed upon by the parties involved (mandated banks and the issuer). Sometimes this may be around dinner time, only you are not having dinner because this is the point where all the mandated banks have a conference call where the bond is priced and terms (interest rate, years to maturity, terms and conditions, etc.) are concluded.

8. The deal is finally announced on Bloomberg. Note: up to this point, everything you've been doing has been considered insider information. Up to this point the deal has been called by some random project name like "Project Umhlabauyalingana" or something. Up to this point you don't know whether you're working for a bank or the CIA.

9. Once the deal has been announced, your work is done and it's passed on to the traders who monitor its activity in the secondary market. 

Deals obviously don't come by every day so in between, work is usually around keeping clients informed about that's happening in the markets, prepping for meetings for potential deals just to keep the relationship going so you're top of mind when one comes up, keeping up to date with the global economy and prepping for any drastic changes that may pop up as a result of. 


Quite a mouthful I know but that was as succinct as I could make it. Hope it's brought some enlightenment and thank you for stopping by!


P.S: Working on a concept that’ll showcase different industries and jobs in a cool and interesting way that I’ll hopefully be sharing with you guys in the near future.