Sample Interview Questions with Suggested Ways of Answering A. This is the dreaded, classic, open-ended interview question and likely to be among the first. When you are interviewing for a Banking & Financial Services job, in addition to the basic interview questions you will be asked during a job interview, you will. We hope you enjoyed this bank interview questions and answers pdf (or, if you're reading this on the website, our non-pdf bank interview questions and.
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If you've come to read this article, either you're just curious and like to learn about job interview tips OR (what's more likely) you're in the. A bank is a financial institution licensed as a receiver of cash deposits. Top 50 Banking Interview Questions & Answers .. Download PDF. Example: Canara bank, syndicate bank, Vijaya bank, etc.., There are total 20 nationalized banks. State bank of India has got 7 subsidiaries they are State bank .
There are a few ways to think about this, but the easiest is to start with the largest coin — quarters — first and then work your way down. Himachal Pradesh Government Jobs. How much do you know about what you actually do in Restructuring? Cash Flow Statement: We got serious interest from about 5 of the companies we approached, which led to 1 strategic buyer and 1 financial sponsor ultimately competing to win the deal. Nice questions and answers about the basic banking knowledge for fresher who want to make their careers in banking industry Reply.
The cashier cheque is issued when rapid settlement is necessary. Home equity loan, also known as the second mortgage, enables you to borrow money against the value of equity in your home.
Based on equity the lender will give you a loan. The borrower can withdraw the amount at any moment of time and pay the interest only on the amount withdrawn. Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. ACH stands for Automated Clearing House, which is an electronic transfer of funds between banks or financial institutions. Availability Float is a time difference between deposits made, and the funds are actually available in the account.
It is time to process a physical cheque into your account. Yield is commonly referred as the dividend, interest or return the investor receives from a security like stock or bond, interest on fix deposit etc. COFI is an index that is used to determine interest rates or changes in the interest rates for certain types of Loans. For certain loan, there is a provision for the borrower to change the interest rate from fixed to variable and vice versa is referred as Convertibility Clause.
Charge off is a declaration by a lender to a borrower for non-payment of the remaining amount, when borrower badly falls into debt. The unpaid amount is settled as a bad debt. As the name suggest, it is an average interest rate offered for U. S dollar or Euro dollar deposited between groups of London banks. It is an international interest rate that follows world economic condition and used as a base rate by banks to set interest rate.
LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Usury rates are generally set by State Law. A pay-day loan is generally, a small amount and a short-term loan available at high interest rate. A borrower normally writes post-dated cheques to the lender in respect to the amount they wish to borrow. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to sign at the back of the cheque.
The signature should match the payee. The image over here shows the endorsed cheque. Special Term Deposits: This amount is accumulated and repaid with the principal amount on maturity of the deposit. Ordinary Term Deposits: In some cases, interest may be credited on a monthly basis. The earned interest on fixed deposits is non-taxable. You can also take a loan against your fixed deposit. This type of Loan is offered to borrower to start their business and can be used to build a storefront, to acquire inventory or pay franchise fees to get a business rolling.
Lines of credit are another type of business loan provided by commercial banks. It is more like a security for your business; the bank allows the customer to withdraw the amount from readily available funds in an adverse time. Customer or Company can pay back over time and withdraw money again without going into the loan process.
It is a Federal Agency U. S that gives funding to small businesses and entrepreneurs. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.
The money is received after 7 days, and then the interest will be recovered for 7 days along with the principal amount.
Cheque discounting service is offered only by few banks. Your email address will not be published. We need to more information about bank. We will be in a better position to help you , if you let us know what exactly you want us to add? What is payment life cycle of ACH? What are real time payments Cases of invalid payments. Payments frauds.
A and Germany. This bank provides loans to their customer to buy T. V, Car, furniture etc. What is overdraft protection? Overdraft protection is a service that is provided by a bank to their customer.
For instance, if you are holding two accounts, saving and credit account, in the same bank. Now if one of your accounts does not have enough cash to process the cheques, or to cover the purchases.
The bank will transfer money from one account to another account, which does not have cash so to prevent check return or to clear your shopping or electricity bills. When the entire loan payment is not amortized over the life of the loan, the remaining balance is due as the final repayment to the lender. Balloon payment can occur within an adjustable rate or fixed rate mortgage Q:: This system places loan on one to six categories, based on the stability and risk associated with the loan.
Why would you want to switch to investment banking? Banking excites you more because of the broader range of opportunities and experiences it gives you. MBAs will need to show more commitment and assure the interviewer they are serious about making a career out of it. Where else are you interviewing? Is it just banking? Other companies? Just banking. Are you mostly interviewing at larger banks like us?
What kinds of options within banking are you considering? If you can mention specific names, that makes your answer even better.
Before you entered business school, I see you switched jobs about once a year. If the opportunity comes up, why would you stay here instead?
Tell me about a time when you failed to honor a commitment. If I gave you an offer right now on the spot would you take it? Other variants of this question include why you want to move to a larger or smaller firm. You can get away with more generic responses in those cases, but if you have a good story you should definitely bring it up. If the topic does arise, just say your lack of offer was because they were not hiring, because the group did poorly or because of the general economic climate.
Since you worked at Bank of America this past year, you probably have the chance to go to a lot of different large banks — why are you interested in us specifically? This question often reflects a lazy interviewer more than http: When you were working at that boutique this past summer, you mentioned how you liked the smaller team and more hands-on environment. Why not just go back there? Why do you want to move to a large bank?
Our Tech, Healthcare and Energy teams have been really successful this year. Say that you want to gain solid technical and modeling skills and be exposed to a wide variety of industries and different markets. Why do you want to work in Capital Markets? With this type of question — whenever a certain area is depressed at the moment or is not doing well — you want to highlight your long-term view of the market and how things recover in time.
Which of our competitors do you admire the most? This is another silly question that is designed to test your knowledge of the industry more than anything else.
The best way to answer: State that you do want to pursue investment banking as a career, after having done extensive research on your own and hopefully, having had a previous internship or other experience in the field that you can point to. What is your career goal? This might be my least favorite question of all time, but some lazy interviewers will ask you anyway.
Analysts can, and arguably should, be more uncertain, while business school graduates need to be confident about their career choice. Not actually giving strengths and weaknesses.
In your internship this past summer, what feedback did you receive? The right way to answer this question is to state specific qualities about you that they liked — such as ambition, drive, attention to detail, or willingness to go the extra mile for the team — and then give some specific examples of times when you demonstrated those qualities. Your all-nighters, the times you stayed the weekend working on a presentation, or the time you caught mistakes someone else above you missed are all good to mention.
What were a few areas that your team said you should try to improve upon? Show how you improved on it, using specific examples. Did you get an offer to return to where you worked last summer? If you did get an offer, this is an easy question: After going through the accounting program at PricewaterhouseCoopers for the past year, what sort of end-of-year review did you get?
For each word you list you should also give sentences to back up what you say, using a specific example for each one. Why would we decide not to give you an offer today? Tell me why we should hire you in 3 sentences. What was your greatest failure?
You have to include anecdotes in your answers because almost every question will ask for a specific event, project or experience. Ideally, you will talk about something that was a success rather than a failure. You should use the following 3-point structure for these questions: State upfront what the problem was — Maximizing returns? Attracting more donors for your nonprofit? Winning more customers?
Talk about the team you worked in, who did what, and what your role was. Did you manage people or delegate tasks? State the results — Did your brand awareness go up? Did you get more funding? More members for your organization? This is one of the fundamental questions that you need to be prepared for, because it will almost always come up in some form in interviews.
Can you describe a situation where a team did not work as intended? Whose fault was it? To make things even easier, you could re-use the story you told in question 1 but instead position it as a failed team situation that turned into a successful one. Can you discuss an ethical challenge you were confronted with and how you responded? What was the most difficult situation you faced as a leader and how did you respond? Point out how you stayed calm and collected in the face of a challenging situation, and how your cool decision-making process led to a positive outcome.
Can you discuss a time where you had to sacrifice your time for the sake of a team project? There are 2 key points: Whatever you did had to involve long hours — hours per week or more 2. It had to have been over an extended time period — so Final Exam week at school would be a poor example. Aim for something that took place over weeks or months instead.
Maybe you were working full-time and also leading your volunteer group to build shelters; maybe you were taking 6 classes, running a fraternity, and then got called upon to direct that huge Cinco de Mayo festival. Do you work better as a leader or a follower? Specific examples to back up the above points are also required.
What is your leadership style? Does the leader make the team? Are you really sure?
How much do you know about what bankers actually do? Based on that, you know that bankers advise companies on transactions — buying and selling other companies, and raising capital. The day-to-day work involves creating presentations, financial analysis and marketing materials such as Executive Summaries. Can you describe briefly what I would do? First, you meet with the client and gather basic information — such as their financial details, an industry overview, and who their customers are.
You http: How much do you know about the lifestyle in this industry? I see you were an English major in college, and had time to participate in a lot of different activities. Can you talk about a time when you had to work long hours and make sacrifices? One point that makes this question different: Can you tell me about the different product and industry groups at our bank? This one is bank-dependent and will differ for boutiques, middle-market firms and bulge brackets — so you need to research it before your interview.
Meanwhile, most bulge bracket banks do not have Restructuring groups at all — that is something that only middle-market and boutique firms do. It depends on the type of deal the bank is pitching for, but the most common structure is: Summary and key recommendations. How do companies select the bankers they work with? Meet with company, create initial marketing materials like the Executive Summary and Offering Memorandum OM , and decide on potential buyers.
Send out Executive Summary to potential buyers to gauge interest. Send NDAs Non-Disclosure Agreements to interested buyers along with more detailed information like the Offering Memorandum, and respond to any follow- up due diligence requests from the buyers. Select which buyers advance to the next round. Continue responding to information requests and setting up due diligence meetings between the company and potential buyers. Negotiate terms of the Purchase Agreement with the winner and announce the deal.
Narrow down the list based on their feedback and decide which ones to approach. Conduct meetings and gauge the receptivity of each potential seller. As discussions with the most likely seller become more serious, conduct more in- depth due diligence and figure out your offer price.
Negotiate the price and key terms of the Purchase Agreement and then announce the transaction. Walk me through a debt issuance deal. Meet with the client and gather basic financial, industry, and customer information. Create an investor memorandum describing all of this. Go out to potential debt investors and win commitments from them to finance the deal. The main differences vs. DCM, by contrast, is more closely tied to the markets and tracks trends and relevant data.
Explain what a divestiture is. Imagine you want to draft a 1-slide company profile for an investor. What would you put there? The top-left is for the business description, headquarters, and key executives. Put a stock chart and the key historical and projected financial metrics and multiples on the top right. The bottom left can have descriptions of products and services, and the bottom right should have key geographies with a color-coded map to make it look pretty.
Common questions include how you would invest a large sum of money, how you would think about investing in companies, and how you would decide whether or not to start a business of your own. To answer these questions successfully, you need to ask the right questions before giving an answer.
Which questions, specifically? Always ask what the investor or business goals are. Always ask if there are any constraints, limitations, time horizons, or any other limiting factors. You should also be citing specific numbers and figures where applicable.
These types of questions often turn into extended dialogues where you try to convince the interviewer of the merits of a particular company or investment. What would you do with it? Are they looking to have big capital gains over 40 years? Are they looking for tax-free retirement income? What types of assets interest them? Based on the response, you can give an appropriate answer. If you owned a small business and were approached by a larger company about an acquisition, how would you think about the offer, and how would you make a decision on what to do?
The key terms to consider would be: Price 2. Form of payment — cash, stock, or debt 3. But those are the key ones.
We do most of our work with technology companies. Can you talk about a trend or company in the industry that has piqued your interest lately? Most interviewees make 3 mistakes with this question: They describe something that is not recent or relevant. What would you do? This is one reason why some private equity investors focus on software companies. You should also explain your reasoning on why this type of business would be attractive and how it could grow with minimal future investment.
Can you talk about a company you admire and what makes them attractive to you? Do not say something commonly known. Saying Google or Apple, for example, would be bad. When you talk about what makes the firm attractive, emphasize qualities that investors would find appealing, such as a great and well-diversified customer base, a unique competitive advantage in the market or a high-margin business model.
Read the relevant Wall Street Journal article on it, and discuss the dynamics of the deal — how it developed, if anyone else was interested, and what implications it has for the industry.
Pitch me a stock. You can refer to 5 in this section — the company you admire — because both these questions are quite similar. The 2 most common mistakes: Failing to list specific financial figures. Saying how the company stacks up relative to its competition, and why its prospects are more favorable. Structure your answer with the following 5 points in mind: Give the name and summarize what the company does.
Give a brief overview of its financials to indicate its size and how profitable it is. Talk about how the next years will be really good for the company. Can you explain to me, in simple terms, the subprime crisis?
In simple terms, banks made mortgage loans to people who were in no position to pay them off — or even meet monthly payments. Since interest rates were at historical lows, borrowing was easy. The 2 most important points to keep in mind: You have a long-term view of your career and are fine making a sacrifice in the short-term. You want to understand the bigger picture and how and why large companies make decisions rather than just working with individual investors.
Working on transactions and making an impact is more interesting to you than giving individual advice to high net worth individuals or institutions. Why are you still interested in banking when you could do anything else?
Where did your interest in finance begin? Otherwise it looks like you became interested on a whim. Also be sure to explain how your initial interest led you into the internships, activities or jobs you pursued and how those have led you to where you are today. If you enjoyed your last internship and got an offer to come back, why are you trying to switch into investment banking now? If this is a small company to big company move or vice versa you can also say something about that, using the standard reasons we went through before — small means more responsibility and client interaction, and big means working on more major deals and learning more technical skills.
This is the key question asked of many career changers and anyone else at the VP-level or above at a company who is looking to switch into banking as an Associate. Here are the major points to emphasize: Banking is faster-paced and appeals to you more because you make more of an impact. That guy over there has a 4. Bankers hire people who 1 Are smart 2 Can do the work and 3 Are likeable. And I spend most of my free time sky diving and going on adventures in different countries.
So while he may be qualified on paper, in banking it all comes down to real-world experience and what kind of camaraderie you have with everyone. No — unless it happens to come up in the meeting, in which case you speak only if the MD asks you about it. In that case you should just briefly acknowledge it and then move to a different topic.
Initially I was pretty upset, but I learned a lot about time management, work ethic, and how to juggle 5 different major responsibilities at once. I lost some time on my peers, but I came out more motivated than before, helped my family get back on their feet, and got started with independent study to help myself catch up. Why did you get a C in accounting?
Maybe you took it upon yourself to do additional self-study — or you changed your approach to studying and did much better in subsequent Accounting classes. Why did you NOT receive a return offer from your internship? Why are we your first choice? Why are you so old? The main mistake you can make here is taking yourself too seriously. So try to have some fun with these. So think about your real personality and say something that matches that. So maybe the headline states that you climbed Mt.
Tell me a joke. The pitch book. First, you have to be able complete an LBO model in 30 minutes. That's very nice! Next, you must be able to spread 10 comps manually in under an hour. Immediately, the dog sits down at the computer and completes everything in only 30 minutes.
Lastly, you must be bilingual. Higher Beta means a higher potential return, but also more risk. You probably want to say above 1. If you can point to something you had to be proactive to get, this is a good time to bring it up. What would you spend the capital on instead? Walk me through one of the deals listed on your resume. They specialized in food and beverages and sold to the US and European markets. They were interested in selling because of a string of recent acquisitions in their market, and felt they could get a premium valuation.
They engaged us to run a broad sell-side process with financial and strategic buyers. They were going public to raise funds so that they could expand beyond China and get into other markets, and we were the lead underwriter on the deal.
Did you do anything quantitative for this deal? It looks like it just involved research. This is a common scenario for summer interns or if you worked at a small boutique where financial modeling was not as common.
Our team did some valuation and financial modeling work as well, but since I was an intern I supported the other Analyst and Associate by finding relevant facts and figures and then going through their models, figuring out how they worked, and then making sure the information was correct.
Why did the company you were representing want to sell? Maybe they received an unsolicited offer, maybe there were a string of recent acquisitions in their market, maybe the founder wanted to exit the business, or maybe the PE firm that owned the company wanted to exit its investment.
You might say something like the following: Why did the company you were representing want to buy another company? For this one you need to talk about what specific type of other company they wanted to buy. Did they want to expand into new geographies?
Get into a new industry? They had tried to do so before, but lacked the expertise and industry contacts — so they wanted to acquire a sizable company that had already done it so they could grow their top-line and also diversify their business. Describe the deal process. They had in mind around strategic buyers that might have been interested, and we added around 30 financial sponsors to their list.
We got serious interest from about 5 of the companies we approached, which led to 1 strategic buyer and 1 financial sponsor ultimately competing to win the deal. What were the major selling points of your client? What was attractive about it? It also had http: The market as a whole was also very favorable because the Swedish population was aging and demand for healthcare could only rise in years to come.
What about its weaknesses? Why might investors be hesitant? You could talk about unfavorable market trends, increased competition, uncertain financial projections, or the threat of new regulation harming the company. Also, massive healthcare reform in the US might make it significantly more difficult to enter that market in the future. What were the major obstacles to getting the deal done?
What happened? These could be anything from disagreements on price to legal issues to problems with retaining the management team. If you can point to any obstacles that you played a role in resolving, bring them up here. Eventually we compromised on both points, and on the second issue I helped create a more detailed revenue model for the company that validated some of our assumptions, so the PE firm agreed to meet us halfway.
What kind of standalone operating model did you create for your client? Usually you do this by looking at revenue in terms of units sold, factories, or production, and you analyze expenses by fixed costs and employees.
Then we combined that with projections for oil prices to estimate their yearly revenue. On the expense side, the majority of costs http: What was the status of this deal when you left your bank?
They were moving closer and had resolved management retention and had come to agreement on the reps and warranties, but they were still locking down the final details, so the deal is pending right now. What did you look at in the due diligence process?
I came up with lists of questions for the customer due diligence calls we conducted, which was important because investors at the time were reluctant to invest in IPOs in emerging markets like Brazil — and by speaking with customers we were able to assess the risk for ourselves. Tell me about the market your client was in. Focus on the major trends and how the company you represented compared to the competition. How did you narrow down potential targets or potential investors?
We looked at some financial sponsors as well, but focused on ones that had sizable healthcare companies in their portfolios. How did you value your client? Just take the standard valuation methodologies and talk about how you applied them to the company you worked with. Note that for IPOs, you only care about public company comparables — for other types of deals you look at a wider range of methodologies.
How did you personally contribute to this deal? One of the most difficult and most important questions you can get. This played an important role in the deal, because http: But most guides have ignored the fact that Restructuring even exists as a division of investment banks.
The questions here cover a broad range of topics, ranging from what Restructuring bankers do to the more technical aspects of debt and transactions with distressed companies. How much do you know about what you actually do in Restructuring? Restructuring bankers advised distressed companies — businesses going bankrupt, in the midst of bankruptcy, or getting out of bankruptcy — and help them change their capital structure to get out of bankruptcy, avoid it in the first place, or assist with a sale of the company depending on the scenario.
Do you know which one we usually advise? Bankers can advise either the debtor the company itself or the creditors anyone that has lent the company money. You need to research which bank does what, but typically Blackstone and Lazard advise the debtor and Houlihan Lokey advises the creditors these 3 are commonly as the top groups in the field.
You also get broader exposure because you see both the bright sides and not-so-bright sides of companies. How are you going to use your experience in Restructuring for your future career goals? See above. How would a distressed company select its Restructuring bankers?
There are only a few banks with good practices, and they are selected on the basis of their experience doing similar deals in the industry as well as their relationships with all the other parties that will be involved in the deal process.
Why would company go bankrupt in the first place? Here are a few of the more common ones: What options are available to a distressed company that can't meet debt obligations?
Sell the company either as a whole or in pieces in an asset sale. File for bankruptcy and use that opportunity to obtain additional financing, restructure its obligations, and be freed of onerous contracts.
What are the advantages and disadvantages of each option? Refinance — Advantages: Least disruptive to company and would help revive confidence; Disadvantages: Difficult to attract investors to a company on the verge of going bankrupt.
Sale — Advantages: Shareholders could get some value and creditors would be less infuriated, knowing that funds are coming; Disadvantages: Unlikely to obtain a good valuation in a distressed sale, so company might sell for a fraction of its true worth 3.
Restructuring — Advantages: Could resolve problems quickly without 3rd party involvement; Disadvantages: Bankruptcy — Advantages: Could be the best way to negotiate with lenders, reduce obligations, and get additional financing; Disadvantages: Significant business disruptions and lack of confidence from customers, and equity investors would likely lose all their money 9.
From the perspective of the creditors, what different strategies do they have available to recover their capital in a distressed situation? Conditional financing — Only agree to invest if the company cuts expenses, stops losing money, and agrees to other terms and covenants. Sale — Force the company to hire an investment bank to sell itself, or parts of itself.
Foreclosure — Bank seizes collateral and forces a bankruptcy filing. How are Restructuring deals different from other types of transactions? The debtor advisor, for example, might have to work with creditors during a forbearance period and then work with lawyers to determine collateral recoveries for each tranche of debt.
Distressed sales can happen very quickly if the company is on the brink of bankruptcy, but those are different from Bankruptcy scenarios. A trustee ensures that all this happens according to plan. If we pretend a distressed company is a cocaine addict, Chapter 7 would be like a heart attack and Chapter 11 would be like rehab.
What is debtor-in-possession DIP financing and how is it used with distressed companies? Theoretically, this makes it easier for distressed companies to emerge from the bankruptcy process — though some argue that DIP financing is actually harmful on an empirical basis. Some DIP lending firms are known for trying to take over companies at a significant discount due to the huge amount of collateral they have. One reason companies might choose to file for Chapter 11 bankruptcy is to get access to DIP financing.
Here are the most common adjustments: Would those adjustments differ for public companies vs. New debtor-in-possession DIP lenders see explanation above 2. Subordinated debt investors similar to high-yield bonds 5.
Mezzanine investors convertibles, convertible preferred stock, preferred stock, PIK 6. For more on the different types of debt, see the LBO section where we have a chart showing the differences between everything. How do you measure the cost of debt for a company if it is too distressed to issue additional debt i. How would valuation change for a distressed company?
This distinction exists because you need to make big adjustments to liabilities with distressed companies. How would a DCF analysis be different in a distressed scenario?