AuthorTopic: credit analysis??
@2004-04-01 11:12:13
Hi guys

I am offered an entry level credit analyst position at a leading bank, I hope you could tell me about the credit analysis field, its pros and cons, and how CFA relates to it ? and if there are some guys with a similar positions on this forum, I would be grateful if they give me a description of their jobs and what would they do to advance themselves in such a career path??

with all appreciation to your contributions .....

@2004-04-02 14:23:53
to be honest CFA barely touches credit.

FRM/PRM go more into credit risk, in the sense of premiums for risky bonds, default modelling etc.

If this is retail credit (eg does mrs smith get the $500 loan to buy the 1979 oldsmobile cutlass), I personally wouldn't touch it.

On the plus side, it gets you through the door and maybe switch once you're in.

@2004-04-03 03:46:37
dear shadi

i am a credit analyst @ MIBank, Egypt
as a financial analyst in a bank u do the following:
-perform an analysis for the co. financials carefully
-qualitative issues are so important
-visit clients from time to another, make sure everthing goes ok
-understand the industry u r working in, and make such analysis for its factors & peer companies. it's very very crucial to do so. (most banks divide its teams between sectors)
-main target is to lend the good co. the suitable package it needs, either short-term or long-term with good terms & conditions, which is mainly according to its CF projections and future plans & asset conversion cycle needs.
-other products like L/Gs , L/Cs, can be offered to facilitate the operations
-main issue is the capabilities of the cashflow paying back whatever borrowed
-keep a close eye on the client to be ready to provide solutions whenever needed

some banks provide a "credit course" for newcomers, like our did with me

wish u good luck


@2004-04-03 07:05:19
there are a whole bunch of things you might be doing.
there are several commercial packages for corporate credit analysis, and at simplest, you will be inputing accounting ratios (eg interest coverage) into one of these packages.
there are lots of other things you might be doing also.
@2004-04-03 14:28:20
I'm a credit analyst. It is an extremely boring job. You will spread financial information into some type of excel program the bank has. You will write up reviews - much of which is just retyping parts of MD&A. You will be expected to give little input. You are a glorified back office data entry clerk with some accounting knowledge. That being said, you do learn how to dissect the sh*t out of financials. (Accounting on the CFA is generally pretty easy for me as I am doing that stuff every day.) I think it is a good job to learn some skills and I think it is a mistake to continue doing it longer than 2 years. And just for the record I hate posts like cfatobe's. Why can't people just say what they do in normal terms instead of making it sound great. For example:

I pull public financial filings, spread them in an excel program and recommend upgrades and downgrades to internal credit ratings.
Most people would say:
I mitigate the company's portfolio risk on the processing platform by staying current on all public filings and news releases. Special attention is paid to liquidity concerns and debt capacity as well as qualitative measures of management. I also stay current with appropriate risk reduction measures available to the bank and structure risk reduction negotiations.
Now the second one is true, but it doesn't really tell you anything. I wish everyone would go with descriptions like the first one to cut through the bullsh*t.
@2004-09-15 21:31:54
I am a credit analyst and I agree with mikexia 100%: it's a big mistake to do it for more than 2 years. When I started 2 year ago, it was my first professional position so I was very excited and enthusiastic. Now, I am looking for a new job I am really bored and sick of it. Though I must say that I learned a lot about financial statement analysis, legal concepts, and business in general. And I do think this job is a good start for a person who wants to build a career in finance.
@2004-09-19 04:41:26
Does working as a credit analyst being considered as a "professional work experience with investment decision-making process" as stated in CFA Institute to be a CFA charter? Please advise. Thx. in advance.
@2004-12-03 16:38:04
Credit experience does count toward CFA work experience..I have to agree with Anna75 and mikexia...I've been doing credit (investment grade and some destressed) for a large foreign bank and its a great learning experience BUT it gets boring around year 2...which is almost as long as i've been can be a good place to learn how to value a company and after make the jump to fixed income...
@2005-04-18 18:02:44
I have to agree with Anna75, Mikexia, Aroman21 etc etc

I am doing CRAC Management( credit risk and assessment ) for 7 yrs, first with a Bank, now with one of the biggest producer in petro-chemie and biotechs.
Thought doing the job outside a Bank could help to find it "challenging" again, but that was totally wrong : most of my time I focused on finding an re-entry to a Bank again - outside CR and now after adding a IFID Certificate to my "basket of courses" I am happy with my new job, outside CR -- however, I hold on to my June exam CFA 1 ( more or less to gimme a "nice word" for my future applications :-) )

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