Classic investment banking interview questions

Your starter for five. Or maybe that should be five for starters...
Investment banking
Applications and interviews

Why do you want to work in investment banking?

  • You've made it to the interview stage for either an internship or a graduate role: congratulations! The chances are you've made up your mind that you want a career in investment banking, but you must be able to articulate why.
  • Everyone knows investment banking is full of intelligent people and that you learn a lot. And let's face it, saying you want a challenge is hardly insightful. So don't reel off these platitudes: you need to personalise your answer.
  • Draw on your past experiences to show that you understand what the industry's about and that you've used that knowledge to formulate your opinion on it.
  • Perhaps you've chaired an investment society, or have a friend or family member who works in investment banking. Using your own experiences shows that you've thought your application through and applied it to your own life.
  • More on this later, but every answer should be used to demonstrate your commercial awareness. Nod to the turbulent time the industry has faced of late, but don't be negative. Why has this not deterred you from seeking a career in investment banking - or better still, why has it inspired you?

Why do you want to work at this bank?

  • While you may have applied to lots of different banks, it's important to do your homework on each, especially if you get to this stage in the recruitment process.
  • Everybody who's made it to the interview stage is likely to be familiar with the bank's website, so, in order to stand out, you need to use the information carefully - don't regurgitate it.
  • Find out if the bank has a niche specialism that interests you and learn as much about it as possible. Or find out about a director of the division you want to work in that's had an interesting career and expand on this at the interview. Show that you've done your homework and that you know what makes the bank different from others.
  • Interviewers will expect you to know what sort of work the bank has done, so find out as much as you can about high-profile deals they've worked on. You should be able to say why you've found them interesting and why they encouraged you to apply.
  • Most banks have campus events, which provide a great chance to speak to employees and to find out why they enjoy working there. Use it as a chance to find out about the bank's culture and don't be afraid to name drop at the interview.

What are the biggest issues facing the UK economy?

  • Banks will test your macroeconomic mettle from as early as your initial online application and will return to it throughout the process. Trying to lodge hundreds of articles in your mind the night before an interview is foolish, so if you don't read the financial press, start doing it now.
  • The Financial Times and the Economist are a great start, but some students find the issues contained within them complex and hard to penetrate. Every fortnight during term, The Gateway tackles many of the same topics as the mainstream business press, but in a more instructive, accessible manner.
  • Don't overcomplicate your answers. In order to truly understand something, you should be able to explain it in the simplest possible terms, so don't use acronyms and terminology if you can't substantiate them.
  • It's not a good idea to forcefully come out on one political side. Answering the above question with "bloody Tories...," for example, won't go down too well. Make sure your answers are balanced and reasoned.
  • Home in on two or three economic issues in some detail, rather than scratching the surface of ten. Use examples you're most confident talking about. If you're up on international affairs, for instance, maybe you should talk about the ongoing eurozone crisis and how it impacts the UK (always relate your answer back to the original question).

Tell us about a time you overcame a challenge.

  • As well as convincing the interviewers that banking's the right line of work for you, you need to persuade them that you're right for them. A large part of this will be done through competency-based questions, such as this one.
  • Think of all of your qualities and list examples of when you've used them. That way, you'll be prepared for a range of different questions. A good way of preparing is to keep a journal. It can often be tough to think of situational examples off the top of your head, but if you're jotting them down every day, they should come back to you more easily.
  • Perhaps you've captained a sports team and used your motivational skills to lead them out of a bad run of form? Maybe you've worked in a pub and had to diffuse a situation that was threatening to get heated? Be creative, but don't lie.
  • Remember, all "challenges" are relative, so while you may not think your history of volunteering or part time work is that impressive, it's the kind of experience employers love.
  • Strike a balance: be confident, but not arrogant. If you've successfully managed a group of people, for instance, don't take all the credit. Being able to work as part of a team is another vital attribute for investment bankers.

Describe the lifecycle of a trade.

  • If hired, you'll receive full technical training, but banks will question you on some semi-technical issues at interview stage as well. The good news is, the answers are readily available to those that seek them.
  • It would be foolhardy to prepare for just one question like this. Ideally, you should look at investment banking as a whole and familiarise yourself with some of the most common and important technicalities. And there is nothing more vital and inseparable from the industry than trading.
  • As with previous answers, it's important not to overcomplicate things: don't use jargon you can't define when called upon to do so. Equally, don't get bogged down in unnecessary (often confusing) detail. Know the main stages of and departments involved in the lifecycle of a trade by heart, but also make sure you can explain them when asked to.
  • Perhaps the best method for getting your head round something like this is to draw it out in diagram format again and again until you've got it down.
  • There are numerous great resources for information like this. Again, The Gateway explains technical issues fortnightly, but we're also big fans of websites like mergersandinquisitions.com and unofficialguidetobanking.com.