Everything you wanted to know about Investment Banking summer internships

Former trader and communications expert Gwyn Day recently stopped by our offices to answer our members' questions about applying for summer internships in the banking sector. In case you couldn't make it, here’s what you missed...

1. What are the advantages of doing an internship in a boutique bank, rather than one of the larger institutions?

Working at a boutique bank offers you a better ratio of senior staff to interns. You will have a better window to display your abilities as you won’t have to compete for attention as much, and you also learn more, and faster.

2. What is the best format for a winning cover letter?

Start with three lines stating your current situation and what you are applying for. Your second paragraph should then give four good reasons why you have chosen this firm, and this division within it. Your next paragraph should give four reasons why you are a good fit for this role and this institution.

3. I was unsuccessful in getting a Spring Week last year, what should I do?

You should apply again, making sure you emphasise what you have done to build your profile in the time since your last application, and why that now makes you suitable.

4. I haven't had any tangible experience to date. How can I prove myself to be a credible candidate?

When you lack experience, you have to make up for it with especially clear knowledge of what this firm in particular offers and how your interests and skills match that. You will also need to work harder to demonstrate your commercial awareness.

5. On applications and at interview, how specific should you be when you state your preferences for the internship? 

As much as possible. It shows that you have done your research and that you are motivated to pursue a particular specialty.

6. How can I develop my technical skills before interview, e.g. valuation techniques required in IBD?

There lots of resources out there. Reading the financial press will get you more familiar with the sector, and for specific topics like valuation techniques, try online videos and courses. There are also summer schools where you can work on these skills.

7. What are good topics to discuss to demonstrate business awareness?

You should have an opinion on the latest economic indicators, as well as an understanding of recent deals and of trends in that sector. Try and show you have a holistic macro understanding - i.e. you know how everything fits together.

 8. Does the signing on fee only apply to the IB division or Markets (Sales and Trading) also? 

This varies from firm to firm.

9. Do you have any advice for the competency tests, e.g. numerical and verbal reasoning? 

Practice! Use assessmentday.com packages or free samples from the test setters such as SHL

10. I’m not studying a finance related degree, am I at a disadvantage?

Not at all. Banks like to recruit a variety of candidates. As far as all the technical aspects go, you will be taught what you need to know.

11. What percentage of candidates are usually invited to interview? 

Generally, the numbers are very low, but it depends on the division.

12. How do you make a good first impression at an interview? 

Firstly, answer all of the questions directly. It is also important that you give specific examples that are clearly structured, when asked to do so. This is not an overly complicated task, but many don’t manage it.

13. What is the key to acing the motivation questions on the initial applications?

Again, answer the question directly. If it is a multi-part question, then answer in the order that it is presented, giving each section equal thought. Make sure you answer within the word limit too, so avoid the use of fluffy, general language.

14. For the numerical tests, what is the threshold pass hold rate for the bank to then proceed with your application?  

There is no set answer for this I’m afraid. Not only does it depend on the bank, it depends on the particular division of the bank too, as well as the test provider.

15. What is the best way to impress in applications? 

The most important thing, always, is your motivation for finance and that bank in particular. Being precise and clear in your answers is always impressive too.

16. Many firms offer similar schemes, how do you choose which one to apply to?

By researching the differences! You know what best fits your current interests, so look closer.

17. How should I prioritise the order of my applications?

Apply in the order that they open, you want to get your applications in as early as possible.

18. How important is a Spring Week? 

They are hugely important. If you get a few under your belt, you can save a lot time and work when you are making your applications the next year.

19. Does my university's reputation or ranking influence the application process? 

Yes, banks do target specific universities.

20. What should I look for when picking a stock to pitch?

Look for a choice where you can present at least four good reasons as to why it's a buy versus its competitors. Basic reasons include factors like price, book value, PEG ratio, or regulatory changes that may favour it, as well as changes in management or intellectual property.

21. How can I convert my Spring Week into a summer internship, and eventually a job offer? 

The short answer is to demonstrate, at every opportunity, what they're looking for in a successful candidate. One of the key ways to do this is to know your technicals inside out and demonstrate themselves as much as possible.