How do you manage bank relationships?
A core Corporate Treasury interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
Treat the bank group as a managed portfolio, not an accident of history. Maintain a core group of relationship banks (often 4–6, sized to the company's needs) and allocate the 'wallet' — fees, FX flow, deposits, and ancillary business — broadly in proportion to the credit and service each provides, because in a relationship-banking model banks extend credit (the RCF, facilities) expecting ancillary returns. Run it with discipline: a bank scorecard rating pricing, service, product capability, balance-sheet commitment, and sector/geographic coverage; periodic relationship reviews and RFPs for key services; and clear, fair communication. Balance concentration (enough wallet to get good service, credit, and support in stress) against diversification (counterparty/credit risk, backup, competitive tension on pricing, and local presence where needed). The goal is reliable access to credit and services across the cycle — especially that banks stand by you in a downturn — at efficient cost, with no single point of failure.
WHAT INTERVIEWERS LISTEN FOR
- ✓Core group (4–6) with wallet allocated to credit/service provided (relationship banking)
- ✓Scorecard on pricing/service/capability/commitment/coverage; periodic reviews/RFPs
- ✓Balance concentration (service/credit/stress support) vs diversification (risk/backup/pricing)
- ✓Goal: reliable cross-cycle access to credit/services at efficient cost
COMMON MISTAKES
- ✗Chasing cheapest pricing, ignoring relationship/credit support
- ✗Over-concentration or unmanaged sprawl of banks
- ✗No scorecard/wallet discipline
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