CAREERS

Careers
Interesting professional and career options with development possibilities

Career in banking

Finance and Accounting

At its most simple, accounting in investment banks involves adding up the company’s profits and losses (P&L) over days, months and years. Life in investment banking is rarely simple, however, with accountants usually engaged in more complicated matters as well. For example, they play an important role in helping a bank monitor how much risk it’s taking and how much money it has made and lost on deals and how accounting supports products launched by the bank. They also prepare reports for the regulator the Central Bank of Malaysia (CBM) to show the bank is playing by the rules, and they advise the bank on the best strategy for making money in the future.

Compliance

If you want to work in the compliance function of an investment bank, you’ll need a healthy respect for rules and regulations. Compliance professionals ensure banks operate within the rules set by the state regulators. As well as interpreting the complicated and ever-changing external rules that these regulators lay down, the compliance function creates a system of internal rules to apply the regulations. “active funds”: while passive fund managers let computer programmes do the legwork, active fund managers actively buy and sell financial products in an attempt to outperform the rest of the market. Active fund managers correspond to most people’s idea of what fund management is: they invest in products which they hope will rise in price over time, in order to sell them on at a profit. Fund managers have the pick of investing in everything from shares, bonds, or real estate, to commodities, such as oil. Different clients are usually prepared to tolerate different amounts of risk in pursuit of growth, so fund management companies usually run several different funds at a time, offering different degrees of risk and growth potential.

Fund Management

Fund managers are professional investors. They invest money on behalf of their clients, which include pension funds, insurance companies, unit trusts (institutional investors), and other repositories of cash, with a view to making it grow. They take a long view, buying financial products in the hope that their value will rise over time. There are two basic kinds of fund: 1) “passive funds”: also called “index trackers”. They select a portfolio of assets whose value will track that of a financial index. A fund can track the Bahrain Stock Exchange and will aim to follow the value of the regions biggest companies, for example. The investment decisions of passive funds are typically made using complex computer-based models.

Human Resources

The mantra of Human Resource professionals everywhere –“People are an organization’s best asset”–should be particularly relevant in investment banks, where the difference between a good and bad employee can be many millions of pounds. The (HR) department is responsible for the people issues that arise in an investment bank including making sure performance is rewarded and sustained. This means everything from hiring and firing, to implementing policies on such workplace issues as training, career development, employee motivation, to paying people and making sure employees efforts support the strategy of the bank.

Information Technology

If you work in the IT department of an investment bank, you’ll be responsible for the labyrinth of technology that underpins any large modern financial organization. Banks use computers for just about everything –from communicating with staff, to storing information on clients, and running complex computer models to price financial products. They are known for having some of the world’s cutting-edge computer systems, where financial products and services are bought and sold electronically.

Internal Audit

Internal Audit is an independent appraisal activity established within the bank to examine and evaluate the effectiveness, efficiency, and economy of its activities. An internal auditor is independent of all activities and functions of the bank and reports directly to the Boards Audit committee. The objectives of Internal Audit are to assist all levels of management of the organization and the Audit Committee of the Board of Directors in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed and by promoting effective control at reasonable cost.

Legal

Banks are large and complex organizations, and most of their activities have legal implications. It is up to the legal department to ensure that all the contracts signed by the bank are watertight, that the bank carries the commitments to which it is contractually bound, and that the bank is sued by as few people as possible.

Marketing and Investment Placement

Marketing and investment placement people act as the interface between banks and its customers. Their role is to sell the banks product and services. They try to present the bank as it would like to be seen. Marketers concern themselves with placing the banks products with customers and ‘reputation management’. In other words they are the front office through which the bank generates it income. The money invested by private equity funds is frequently used for management buy-outs (MBOs), where a company, or a division of a company, is bought by its managers. Alternatively, it may be used for a management buy-in (MBI), where managers from outside take over a company. ‘Venture capital’ and ‘private equity’ are often used interchangeably. But strictly speaking, venture capital refers to the provision of funds for new and developing businesses, while private equity is more usually associated with MBOs and MBIs. Investors in private equity funds include pension funds, wealthy individuals, and institutional investors. Private equity funds typically have a lifetime of up to ten years, at the end of which all investments are sold on.

Private Equity and Venture Capital

Private equity funds exist to help raise money for companies in need of cash. They do this by offering cash to companies in return for an ownership stake. As a result, they become co-owners, or even sole owners, of the companies in which they invest. In the ideal situation they invest in an underperforming company, turn it around, and sell their stake at a profit some years later. The properties are aggressively managed over the investment term to increase cash flow from operations and to build value so the customers get a good return on their investment.

Real Estate Investment

The real estate team sources, performs due diligence, finances and acquires properties that offer clients investment opportunities with the potential for both strong cash flow and attractive capital gains over a three to five year investment period. The team initially gets the real estate acquisitions with a combination of third party mortgage debt and equity (i.e. shares in the property).The properties are often assembled into portfolios and sold as shares to customers and clients.

Risk Management

Risk managers exist to stop bankers from doing anything rash. A restraining influence on a bank’s risky activities, they ensure a bank is not overexposed to plummeting stock markets, and stop huge loans being made to companies on the verge of bankruptcy. They also ensure business continues as normal in the event of computer system failure or a terrorist attack. The risks faced by financial institutions come in several forms, including:

•    Credit risk: the risk that a particular company or an individual will default on their obligation to repay their debts.
•    Operational risk: the risk that something might go wrong in the day-to-day running of the bank, from computer failures and hurricanes, to employee fraud.
•    Reputational risk: the risk that something will happen to damage a bank’s good reputation; is sometimes considered a sub sector of operational risk.
•    Market risk: the risk that a whole group of traded financial products (e.g.. stocks, bonds or commodities) falls in value simultaneously, due to such outside events as rising oil prices and terrorist bombs; is also known as “systemic risk”.

Operations

The operations division is also known as the ‘back office’. Unlike the marketing and investment people of the ‘front office’, people working in operations don’t liaise with customers to generate revenues and profits for the bank. Instead, the operations division is a support function for the front office, making sure processes work smoothly and the bank gets paid. The business of operations covers everything from IT, to human resources, accounting and risk management. Its functions are so broad that operations employees typically specialise in only one of these areas. At its centre is the core function of clearing and settling trades.

Where do I get more information?

If you are interested in a dynamic career in banking, have banking work experience and excellent academic qualifications, please upload your CV here or go back to homepage.