Corporate Sales, Financial Markets, ING Wholesale Banking in Amsterdam
How does your day start?
I’m usually up early and get to work by 8.30am, having cycled 25 minutes to work: I live close to the centre of Amsterdam. The moment I get in, it’s straight to work. I work in Financial Markets in a team of 10 people in Amsterdam that work with corporates. We each have our own clients and areas of responsibility so we don’t start the day with a team meeting. Our desks are arranged in a circle and we always catch up when there’s time during the day. The first thing I do after logging on to my various systems is to check what happened after markets closed the evening before. What I’m looking for is not just market information – euro/dollar changes or how benchmark rates like Euribor or Libor have moved – but political or central bank statements that have the potential to move markets and updates on corporates. Getting a general feeling of how markets might react to information – such as a development in the Brexit debate in the UK – gives us a headstart on the kinds of things we might have to deal with during the day, while being up to speed on latest news on corporates is a must.
What does your job involve?
My role at corporate sales is essentially about providing interest rate, FX and commodities risk mitigation solutions to corporates and managing the client relationship. Obviously, most clients have a broader relationship with ING, which our Corporate Clients team is responsible for, but Financial Markets is a key link to corporate’s treasury. My 20 corporate clients are generally headquartered in the Netherlands but operate globally. I speak to their treasury staff on a regular basis – some call every day – so I get to know them pretty well. I also make it my business to understand their strategy, business plans and treasury structures, such as whether they manage flows by using inter-company loans, for example. We don’t provide advisory services but by knowing what clients are up to, we can provide them with information such as research or more specific a quantitative analysis to explain the implications of different hedging strategies on their business. As we’re constantly following the market we can also spot opportunities clients might miss: if markets suddenly move and the dollar becomes attractively priced, we might alert a client whose business requires a regular supply of dollars, for example.
What kind of tasks do you do during the day?
My daily tasks are split into two categories: strategic work that can be anticipated and may be related to capital markets, structured finance or other transactions; and client-driven work that responds to market changes or other developments. I really enjoy balancing the two different activities: it gives my day some structure while still requiring me to take a hands-on approach to market developments and volatility. There are always rumours and events that drive markets and it’s exciting to be in an environment that changes constantly. I joined ING three years ago on the trainee scheme and in my second six-month rotation moved to Financial Markets: at the end of the rotation, I agreed with my boss that this was the right place to stay. I’ve had my own clients since July last year.
What do you do for clients?
During a typical day I may execute a couple of FX trades – but every day varies. Because each trade is designed to mitigate the client’s financial risk, each is different. For example, a client may be financed by the bank in euro and is therefore exposed to Euribor, which is a floating rate benchmark often used to price borrowing. In order to avoid the impact of market fluctuations on their repayment schedule and hence their projected cashflows and profit and loss statement, they decided to hedge the entire exposure of this facility. They approached us to hedge their interest rate risk. We provided an indicative quote in the morning and were asked for live pricing in the afternoon: having been selected we concluded the transaction.
How do you price a trade?
Pricing is complex: obviously market rates are the benchmark but the price offered to a client depends on the client relationship – ultimately the bank is taking risk (and must absorb regulatory costs associated with the trade) so this, and the clients’ credit rating, must be reflected in the price. Clients almost always seek prices from other banks, so while we have to reflect risks and costs, we also have to be extremely competitive. Once the initial pricing is submitted, clients will often ask a shortlist of two or three banks for a live quote – sometimes all the banks are on the call at the same time. You have to be alert!
What other types of trade might you do?
Later in the day I might do another trade to mitigate a client’s currency exposure resulting from having underlying flows in a different currency to their functional currency: they might buy products in US dollars but use euro as a functional currency, for example. For FX, we work with the traders to get pricing – we have direct lines with the trading desks in Brussels and London – which we then provide to the client. They’ll either accept the rate or might need an update at a later time. Once we’ve reached a satisfactory conclusion, we will execute and the trader will manage ING’s positions to eliminate any risk.
Is pricing the only important from a client perspective?
Although pricing is most important, we also offer the benefit of our market knowledge to clients: for example, we would dissuade them from closing a transaction when there is important European Central Bank or Federal Reserve press conference as markets may be volatile and would alert them to particular times when markets are less liquid. Most FX trading is in G10 currencies but we can also provide pricing for more exotic currencies such as non-deliverable Brazilian real. Of course, regulation has become much more stringent since the crisis and it’s my responsibility to ensure the proper limits and documents, such as an ISDA agreement, are in place before the trade takes place.
When you your work day finish?
Work finishes at about 6pm and I’ll cycle home. There’s a bit of out-of-work socialising, either in the department or among people who came up through the trainee scheme. Besides being fun, it also provides a great opportunity to get a broader view of what’s going on within the bank.