Credit risk management roles are particularly stressful positions, and often lead to the feeling of disempowerment to boot. However, if you have the temperament to survive and thrive in such an environment, then your employment prospects on Wall Street are looking up.
Despite the fact that many banks have been ramping up their cost-cutting efforts, risk management is one area where most firms are much more reluctant to cut anyone.
“We’ve seen a lot of interest in hiring people with experience in credit risk – both within banks and outside,” said Christian Novissimo, managing partner of accounting and finance at Lucas Group.
Novissimo said that he has seen heavy demand coming from the energy-, telecom- and consumer products-focused divisions of banks and other financial services firms. Usually the sweet spot is the range of between four and 10 years of experience, from associates to managers and directors, he said.
The salary for a senior credit risk analyst is in the $85k range plus bonus, Novissimo said. Managers typically earn $120k plus bonus, while director-level risk management professionals bring in anywhere from $150k and $200k plus bonus.
Within the credit risk space, model development and model validation experience is particularly hot. Anthony Hanna, senior consultant for credit risk and operational risk at Selby Jennings. In particular, hiring managers want risk management professionals who have worked on commercial and industrial (C&I) and real estate portfolios.
Hanna said that there is currently the most demand for VP- and director-level credit risk candidates.
“The biggest reason is these types of products in wholesale portfolios are particularly complex, and aside from being able to work with models, they want someone who understands macroeconomic factors as well,” Hanna said. “Juniors generally don’t have an advanced level of understanding to come in and have the know-how to do the work that needs to be done.”
There has also been pressure from regulators for financial institutions to increase hiring in the credit risk space.
Banks used to go to Moody’s and pay for a default model for commercial real estate, rather than buying external models, but now they are trying to hire people to build such models in house, Hanna said.
All the tier-one banks are hiring for their modeling teams, and even the smaller and mid-sized banks, those with less than $500bn in assets, are looking to hire in that space as well, he said.
“Pretty much across the board, if anyone has those kinds of skills and is looking for a new position, they’re likely to be able to find one at any size of bank, from J.P. Morgan or Goldman to some of the smaller banks as well,” Hanna said.
For the quantitative side, the bottom end of the salary range for credit risk VPs starts around $150k, whereas the higher end of the range is around $180k or $190k, according to Hanna. Bonuses are typically around 25% at the low end, whereas the industry standard is around 30% for those types of roles. All told, including base and bonus, a credit risk VP can hope to bring in around $230k on the high end of the spectrum.
At the director level, base salaries for credit risk professionals are often around $190k or $200k, up to $230k or $240k on the high end, plus a 30% to 40% bonus. All told, including base and bonus, a credit risk director can hope to bring in around $300k on the high end.
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