Commercial Banking Interview Questions Guide

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In this guide, we've categorized the interview questions into two main areas:

  • Technical (Finance and Accounting)
  • Behavioral (Personality and Relationships)
We also provide what we believe are the best answers to these commercial banking interview questions. For other careers, please check out all our interview guides.



1. Technical Commercial Banking Interview Questions

A. How would you determine the creditworthiness of a company?

To determine a company's creditworthiness, there are two main approaches: assets and cash flow. A thorough analysis involves a full financial examination of the business based on its financial statements, market conditions, and the management team.

Asset Approach: Understand the true value of the assets, their liquidity, and their potential resale value.
Cash Flow Approach: Analyze the historical ability to generate cash flow (or net income, EBIT, EBITDA, etc.), and create a realistic forecast to assess how much debt the company can service.
Learn more in CFI’s Loan Pricing course.

B. If you were asked to analyze a set of financial statements, what would you do?

First, organize the financial statements in a clean Excel workbook or company template. Next, calculate various ratios, including profitability, growth, margins, leverage, and liquidity. Finally, analyze these ratios to identify trends based on at least three years of historical data, and extrapolate these trends into the future.

C. Name some important credit metrics

Common credit metrics include:

Leverage: Debt to equity, debt to capital, debt to EBITDA, interest coverage ratio (or fixed charge coverage ratio), and variations of these ratios.
Liquidity: Working capital, current ratio, quick ratio, cash ratio.

D. Where do you think interest rates are headed?

Demonstrate that you know the current interest rates and can identify intelligent scenarios that might cause them to rise or fall. Avoid making precise predictions but show that you’re informed about economic indicators and trends.

E. If you were given an income statement where revenue was going up and net income was going down, what would you think the problem is?

Several issues could cause this discrepancy. The most likely explanations include:

Increased marketing expenses to drive revenue growth.
Decreasing prices to boost sales.
An increase in the cost of goods sold.
Changes in accounting policies, such as no longer capitalizing expenses that were previously capitalized.
Further investigation into the income statement is necessary to pinpoint the exact issue.

F. What’s more important, the income statement, balance sheet, or cash flow statement?

All three financial statements are crucial and interdependent.

Income Statement: Shows what a company earns over time and its operating margins.
Balance Sheet: Reveals what a company owns and owes.
Cash Flow Statement: Indicates how much actual cash the business is generating or consuming.
Together, they provide a comprehensive view of a company’s financial health.


2. Behavioral Commercial Banking Interview Questions

A. How do you manage risk in your personal life?

Show your ability to apply risk management principles in everyday scenarios. Discuss different types of risk (risk of loss, risk of missing out, risk vs. reward, etc.) and how you manage them, whether in finances or personal activities.

B. What does it take to be a great commercial banker?

Highlight the key skills required in commercial banking: analytics and sales/relationship management. Tie your response to your personal skills and experiences that align with these requirements.

C. Where do you see yourself in five years, if you’re hired?

It's important to strike a balance in your response. Show ambition but avoid making it seem like you intend to leave the position in a few years. Express a commitment to growing within the commercial banking sector and contributing to the bank’s success.

D. Describe your approach to sales

Your response should reflect your suitability for a sales-oriented role in commercial banking. Discuss various sales approaches, such as relationship-based, need-based, and value-based sales, and explain how you implement these strategies effectively.

This guide provides a comprehensive overview of common commercial banking interview questions, along with recommended answers. Preparing with this information can help you demonstrate both your technical knowledge and your fit within the banking industry.






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