new jobs this week On EmploymentCrossing

547

jobs added today on EmploymentCrossing

10

job type count

On EmploymentCrossing

Healthcare Jobs(342,151)
Blue-collar Jobs(272,661)
Managerial Jobs(204,989)
Retail Jobs(174,607)
Sales Jobs(161,029)
Nursing Jobs(142,882)
Information Technology Jobs(128,503)

The Loan Officer

8 Views
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.
Central to the bank-client relationship is the loan officer. The term loan officer is somewhat outdated, as today's officer is involved in much more than lending. Other titles used for this position are relationship manager, account officer, and calling officer.

The loan officer is the bank's primary representative to a customer or client. In this position, you would foster, maintain, and if possible extend the bank-client relationship. This involves administering present accounts and loans the client company has with the bank and showing it the need for additional financial services.

To be able to fulfill your responsibilities as a loan officer you must be knowledgeable about the other financial services the bank offers. If you cannot fulfill a client's financial request with the resources at hand, you must be able to direct the request to someone in a different area at the bank who can. Many times loan officers, recognizing areas within a client's financial organization that could be helped by services the bank offers, work with a specialty-area staff to make a selling presentation to the client.



In order to administer a client company's banking business and anticipate further financial needs, you must be informed about its business situation. This involves understanding its balance sheet and income statements as well as being knowledgeable about its business as a whole: what it does, how it does it, problems and opportunities it experiences, and where it is going or trying to go. When clients have ideas about what they want to accomplish but are not sure how to go about it, you should be in a position to provide creative financial solutions to these questions.

The basic responsibilities of loan officers are similar throughout the banking industry. But the tasks they do and the problems and issues they face vary according to the types of client they serve. For instance, in deciding whether or not to extend a loan, if the client is a well-established blue-chip corporation, there are different issues involved from those if it is an entrepreneurial venture. Similarly, the financial services required by a corporation are different from those required by a government. Therefore, loan officers often specialize early in their career in the type of client they serve. The following sections examine the work of loan officers in some typical banking divisions, discussing types of clients they serve and their main activities.

Corporate Banking: The corporate-banking sector of a commercial bank is often subdivided into industry categories, and its loan officers will tend to specialize in certain industries. As a loan officer in corporate banking, you would spend much time analyzing companies to decide whether they are acceptable risks. If they are deemed acceptable, you would then prepare and administer the loans. When a large, well-established company is being considered, the job involves less analysis of risk and more salesmanship. For example, if IBM wants to take out a loan, the question is not whether to lend them the money, but rather who gets to lend them the money. You must show that your bank can provide the required capital at the best terms with the best service.

However, most firms requesting capital are considerably smaller and of lower standing than IBM. Many banks have lending sectors that specialize in medium-size firms having sales of approximately $5-$100 million. These businesses are often entrepreneurial concerns, possibly in new industries; here, risk analysis is an important part of the lending officer's activity. The lending officer must weigh correctly how much risk the bank is willing to assume against the potential return-not only in terms of the loan being considered, but also the future business that a successful, growing corporation could give the bank over ten or twenty years.

As a lending officer, you would also be a financial consultant to large or small corporations. With large corporations, you would identify the capital needs of a client, and try to sell it additional loans to meet these needs. With medium-size corporations, you would provide help on a variety of financial matters in addition to loans, by tapping the large resources the bank has that the client lacks. You must maintain profitable relationships with clients and help them grow.

Lending officers also try to generate new clients. This involves researching a potential client company by studying financial statements and other material, and trying to establish whether a company needs a loan or other bank service. After financial needs are established, a sales call on the corporation's executives is arranged by the bank. If the call is successful, the lending officer will proceed to service the client's financial needs, on an ongoing basis. Even if the call is unsuccessful, it will have left an impression with the company of assertiveness, initiative, and creative thinking.

Real Estate Lending: Real estate lending, a specialized area of corporate banking, is complex and generally entails higher risk than other areas of corporate lending. Two main types of real estate loans are land development and construction. Land development loans are considered more desirable because they may result in a long-term relationship with the client, while construction loans tend to be one-time arrangements.

As a lending officer working with real estate business deals, you would have to have specialized skills: knowledge of construction methods and materials, perceptivity about construction and development trends nationwide, familiarity with local zoning and legal issues, and familiarity with real estate appraisal techniques.

Institutional Banking: Institutional clients include correspondent commercial banks, insurance companies, savings and loan associations, thrift societies, and other financial service companies. A fundamental difference between a commercial bank's relationship with an institutional client and that with a corporate client is that institutional clients do not need capital to buy goods. They need funds for liquidity or to lend themselves. Therefore, the bank often participates in financial deals with the client rather than simply lending money. For example, when a bank provides money to a security-firm client for the purchase of stocks or bonds, it may receive part of the proceeds from the resale, or securities themselves, as payment.

As a loan officer in this area, you would spend a lot of time marketing non-loan services to institutional clients-for example, trust management services to insurance companies. Many fee-based services are extended to client correspondent banks, such as advisory services on bankroll and credit analysis and employee training programs. These are in addition to the check clearing commonly performed for the client bank in exchange for a compensatory balance held by that bank at the large money center bank.

International Banking: Clients handled in the international banking division include foreign corporations, banks and other financial institutions, governments, and subsidiaries of multinational corporations. International banking, like domestic banking, is usually divided along geographical lines and according to type of client (corporate or institutional) and industry. As a loan officer in international banking, your assignment might be in Far Eastern institutional lending, or perhaps Argentinean medium-size corporations. International banking activities are conducted both at commercial banks' corporate headquarters in the United States and in branch or representative offices abroad. Alternatively, an international banking position may be working for a foreign financial institution in the U.S. In this situation you become the "foreigner" within the corporation.

The main differences between banking activity that involves domestic parties only and activity that involves foreign parties are foreign exchange rates and their fluctuation and greater financial risk or uncertainty. An American bank lending money to a foreign corporation must take into consideration not only the risk associated with that corporation but also "country risk" due to potential political problems in the particular country, inflation, and also the risk associated with currency fluctuation. In complicated loans involving several institutions or corporations in several countries, two, three, or even more currencies can be involved, each with a different fluctuation possibility. The loan officer must determine what currency provides the least amount of risk, and in what currency the loan should be made. He or she must also know when to determine when risks associated with the corporation's external environment-such as political instability-outweigh financial gains from the loan.

In international banking, your knowledge of the foreign culture and market are as important as your financial analysis skills. You must actively promote fee-based services to institutional and corporate clients, such as international money transferring, international check clearing, and letters of credit. In addition, you must be knowledgeable about a broad scope of international business issues and trends in import-export industries. This knowledge is essential for extending further services to existing clients and for developing new clients.

You must have good language skills; knowledge of at least one foreign language is generally a prerequisite. A loan officer interested in international banking must also feel comfortable in, and be adaptable to, foreign cultures. Foreign relocation may be part of an assignment.

Required Skills and Educational Background

An MBA can help you enter a professional banking career. Large banks do hire people with bachelor's degrees (who often have quantitative or finance backgrounds or receive such backgrounds in training programs offered by the banks), but generally not at the same level as MBAs (who may have undergraduate backgrounds in almost any area).

A loan officer must have a general background in finance, including accounting, principles of economics, corporate finance, and credit analysis. These quantitative abilities must be combined with many other qualities, especially marketing ability, good written and oral communication skills, and analytical ability. Analytical ability is perhaps the most important, for no successful decision can be reached if numerical analysis is not combined with good judgment.

Loan officers must be able to work effectively with others. Banking is a team effort, and those who cannot interact effectively cannot be effective bankers. In addition, officers must work well within the highly structured world that banking is.

A conservativeness that shows caution and seriousness but not an aversion to change is an important attribute for a loan officer. This quality must be combined with an entrepreneurial spirit. Many profitable relationships for a bank appear unprofitable at first-loan officers must be willing to take intelligent chances. Conservativeness, common sense, and good judgment must be combined with creativity and confidence.

Ambition is also a virtue in loan officers. As banking has become more competitive, many of the so-called gentlemanly qualities of banking have given way to assertiveness and competitiveness. As a result, loan officers anticipate the financial requirements of their clients, rather than wait for opportunities to present themselves. Personal advancement only comes to those who can consistently produce for the bank.
If this article has helped you in some way, will you say thanks by sharing it through a share, like, a link, or an email to someone you think would appreciate the reference.



I found a new job! Thanks for your help.
Thomas B - ,
  • All we do is research jobs.
  • Our team of researchers, programmers, and analysts find you jobs from over 1,000 career pages and other sources
  • Our members get more interviews and jobs than people who use "public job boards"
Shoot for the moon. Even if you miss it, you will land among the stars.
EmploymentCrossing - #1 Job Aggregation and Private Job-Opening Research Service — The Most Quality Jobs Anywhere
EmploymentCrossing is the first job consolidation service in the employment industry to seek to include every job that exists in the world.
Copyright © 2024 EmploymentCrossing - All rights reserved. 21