Eye on Alumni: Saffet Tinaztepe '10
Saffet Tinaztepe (International Trade, Finance and Development '10) is a corporate banking analyst at Citigroup in New York. The work culture is intense, with decisions made today that could be tomorrow's financial news headlines.
What are your main responsibilities at Citigroup?
I have two primary responsibilities. First, I am a corporate banking analyst on a coverage team that is responsible for banking technology, media, and telecommunications (TMT) clients. My second responsibility is to calculate our expected return on loan deals that are proposed by other TMT corporate and investment bankers.
Tell us about a day in the life of a corporate banking analyst.
A typical day for me actually starts the night before. I'm coordinating our relationship with a major music company's Asia/Pacific business, so my Blackberry will start buzzing with emails from regional Citi bankers as I'm getting ready for bed. First thing in the morning, around 9am, I'll reply and follow up on those emails. Today we have a call with the company's global treasurer, and the fact that we've been helping them on funds transfer issues in Latin America will mean that it'll be easier to deepen our ties in Asia.
After that I'll start looking at the latest financial statements and earnings reports of other clients to identify other opportunities for our team. Just before noon I'll get an email from another deal team asking for a returns analysis on a new loan that they want to extend to one of their clients. Since starting, I've learned that lending by itself is not a profitable business for a bank like Citigroup. But in order to gain access to profitable business (Like M&A, bonds issuances, IPOs, capital markets transactions), a bank must be exposed to the company's loan portfolio. Prior to the crisis, banks would hand out hundreds of millions of dollars in the hopes that this business would come later and make the relationship profitable. Now the loan must be justifiable in its own right and we have to be able to show a probability adjusted "pipeline" of future business with a client. I've seen loan pricing models form both before and after the crisis, and it's clear that today's industry has a completely different pricing model. Determining our rate of return on a deal involves conversations with the deal team, the risk team, and then actually calculating returns. This will take up most of my afternoon.
I use the evening to work on side projects. Right now we're running historical deals through a Basel II calculator (funny, given that we're already on Basel III) so that we know what kind of results to expect going forward. While I'm working I'll be able to order dinner on the company account. As I wrap up for the day our colleagues in Asia are starting theirs. Last week my Associate and I had a call with an FX trader in Seoul who had just executed a large swap trade for our music company client, but said that the Risk department didn't want to allow the transaction again. Tomorrow's task will be to explain to Risk why they should change their minds!
Sounds intense! Any particularly exciting moments that stand out for you?
On my second day I was reading the morning news on the TMT sector and saw that the largest American Spanish-language broadcaster was seeking to refinance their expiring credit facility. The article said that two of our competitor institutions would be on the deal and that the company would be taking proposals for another week. I brought it to my manager's attention; we looked at the company's financials and ran some returns. It was an exciting morning for me and even though we decided not to make an offer, it highlighted how close my work is to what's on the front page of the financial news.
The very definition of "real world" applications for your ITFD coursework...
My day to day work involves Prof.
Joachim Voth's "Crises and Crashes" course and Prof.
Angel León's "Investments" course. In "Crises" we talked a bit about the purpose of the financial sector within the economy. As I understood it, at its core, the financial sector has two jobs. First it has to provide liquidity to the market and second it has to be able to discern which companies will make the best use of the capital they are offered. This is exactly my job. One of the primary types of loans we extend is called a "Revolver." Typically a revolver is an infrequently drawn source of funding that a bank will set aside for a company to help it meet its obligations in the event of an unexpected period of illiquidity. It's up to us to determine which companies should get that support.
The "Investments" course has been useful to me because of the risk and expected loss metrics we learned about.
Overall, I'd say that attending the GSE and living in Barcelona was one of the best decisions of my life. The theory I learned from our professors is providing me with an excellent context and background for the work I do. My favorite classes were "Soverign Debt" and "Money and Exchange Rates" with Prof.
Fernando Broner. Eventually I hope for my work to involve that material as well.
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