Investment Banking Interview Questions
The banking interview questions, fall into a number of distinct areas. You will find the graduate interviews to be more difficult and technical than the intern positions. Remember most candidates that have got through to the interview, will have the required academic qualifications and will also have passed the online tests, so you need to think through what your competitive edge might be. The interviews are looking to test your softer skills, your motivation and your knowledge. Here are the categories of question you will be faced with:
1. You, your education, your work experience etc
Ensure you know your CV and covering letter in detail and be able to answer questions on it. Specifically why you took certain decisions and how your experience relates to a banking career. e.g. why you chose your A Level subjects, how your work experience could relate to working in the bank, where you see yourself in the future.
2. Competency Questions
These are very common and you will be asked a series of competency questions testing whether you have the skills they are looking for. See the Student Ladder video and e-booklet on how to tackle competency interviews for in depth help and advice. The interviews will be looking to test team work, numerical and analytical ability, initiative, robustness and ability to work under pressure, leadership and communication skills. Ensure you can answer a question on your strengths and weaknesses. Banks will be looking for a cultural fit - particularly as the environment requires long hours, hard graft, a robustness and ability to handle pressure and to think on your feet. Typical questions could include:
- Tell me about a time when you have had to work under pressure
- Describe a situation when you have failed at something and what did you do
- Describe a time when you had to persuade someone of something they did not want to do
3. Your motivation and suitability for a banking career.
You need to be able to communicate the reasons the industry attracts you ( for e.g. the global nature, fast pace, dynamism, intellectual challenge, money, or analytical aspect). You also need to be answer why you are interested in that particular role, that division and that specific bank. Demonstrate your motivation by things you have done and been involved with. Learn to match your ‘skill set’ to the demands of the industry and the competencies they are looking for. Be able to answer questions such as:
- Why do you believe you are better than others for the role?
- How do you think you will add value?
4. Your understanding of the role within investment banking and what you think you will be doing.
Your answers will depend on your role. Ensure you have researched it well and can eloquently explain it, in detail. ( for e.g. in IB, you will be building financial models, in a trading role, you will be learning the systems such as Bloomberg and shadowing someone senior to learn how to trade before you are given a book of your own and in a sales role, it would be developing trade ideas and liaising with clients to promote them).
5. Demonstrating your understanding and knowledge of the financial markets.
These often come up as technical questions. You might also be asked to name a financial deal that currently interests you, or asked about the price of gold, or the price of oil, the current index level of the FTSE etc. It might be something about the impact of a recession or down turn or a question about QE. Understand the difference between debt and equity, what an IPO is, the different ways of raising finance and their disadvantages and advantages. Understand basic derivatives and be able to explain how they are used. Understand accounts, what a DCF is etc. Read as much as you can. In applying for M&A, understand the basics metrics of a deal. Understand the hot topics and emerging trends effecting the industry and have an opinion on them. Also have a view of where you may invest money today, if asked.
6. Knowledge of the Bank you are applying to.
You need to ‘study’ their website. You will be expected to know about some of the deals they might be working on, their strategy, how they differentiate themselves from their competitors, their business streams and where they make their money, their current share price, who their CEO is. Ensure you know how the financial crisis effected them, a recent development at the bank, and the current issues. facing them.
7. Market Sizing Questions
These continue to be a popular. They are a sort of brain teaser where you are asked how many of something there is e.g. How many golf balls can you fit in a mini, or how many light bulbs in London or how many cups of coffee are drunk in the Uk. You obviously do not know the answer. They want to see how you logically get to an assessment. You need to talk out loud by explaining your assumptions and how you could hypothetically get to answer. For e.g…if there are x people in London and Y% drink coffee and they drink on average Z many cups a day then….
8. Maths questions.
These seem to come up a lot. You could possibly get asked a series of maths questions - and expected to answer on the spot. They could be probability, angles, division/multiplication of very large numbers, square roots etc.
Questions you may want to ask
Have a few sensible informed questions prepared. For example:
- ask about a deal or a piece of work currently being undertaken by the division
- ask about the impact of a recent event ( by a regulator, competitor, client etc)
- ask about the divisions business strategy
- ask about the role and how it will develop going forward
- ask what sort of person succeeds in the bank