Skip to content
// ← EVERY SEATTHE CREDIT LINE

First floor · The lending desk

Workout and Recoveries Manager

Takes the files that have gone wrong and works out how much the bank gets back, and how.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// 01 — WHAT A WORKOUT AND RECOVERIES MANAGER DOES

The clients are distressed, the information is worse than usual and the options are all unattractive: restructure, sell, wait, or enforce. It is legal, commercial and human at once, and it is the seat where every optimistic assumption made at origination is finally tested.

// 02 — WHO ARRIVES HERE

Almost always from inside credit, and often the making of a lender: bankers who have spent time in workout read new proposals differently for the rest of their careers.

// 03 — WHAT THE INTERVIEW ASKS

These are the shapes the round takes, not a question bank — banks phrase them differently and the wording is never the point.

  1. 01A borrower cannot service its facility. Walk me through your first week.
  2. 02How do you decide between restructuring and enforcing?
  3. 03What is this security actually worth, and to whom?
  4. 04The director says give me six months. Do you?
  5. 05How do you keep a relationship with someone whose business you may have to close?
  6. 06What do you wish the original credit paper had said?

What the panel is listening for. Whether you can be decisive and humane in the same conversation, and whether you deal in what is recoverable rather than what is owed.

Practise the round in the credit and lending quiz: five questions these panels ask, with the senior interviewer's read on every answer.

Take the quiz →

// 04 — WHY CREDIT PAYS IN THIS SEAT

Nothing sharpens a credit read like watching what actually fails; this seat is where the difference between a plausible file and a survivable one becomes visible.

Workout bankers read new proposals differently because they have seen how the optimism in a credit paper plays out. Below: a day in the seat, what the first year tests, and the files where the first signs are already visible.

START HERE · How banks manage credit risk

// 05 — A DAY IN THE SEAT

  1. 08:30Cash on the files in workout: which businesses paid wages this week, and which did not.
  2. 10:00A director who needs six months, and a plan that needs twelve.
  3. 12:00The security review: what the property, the stock and the receivables would realise, and how long it would take.
  4. 14:00An independent adviser's report on whether the business plan holds.
  5. 15:30The options paper — restructure, sell, wait or enforce — with what the bank recovers under each.

The shape of a day, not a rota — banks and books differ. A relationship manager's day is on what a commercial banker does.

// 06 — WHAT THE FIRST YEAR TESTS

  • Whether you deal in what is recoverable rather than what is owed.
  • Whether you can be decisive and humane in the same conversation.
  • Whether your security values survive a real sale.
  • Whether you can tell a business that needs time from one that is using it.

// 07 — WHAT YOU SEE FROM HERE

Everything that went wrong, and — in the original credit papers — why. It is the bank's own record of its optimism: the covenant waived in a good year, the guarantee released early, the forecast accepted because the last one was fine.

// 08 — THE FILES TO PRACTISE ON

// 09 — WHERE THE SEAT LEADS

Back into origination or sanctioning, usually as a noticeably harder reader of proposals; into senior credit roles; or further into restructuring as a specialist. Few seats change how a banker reads a file more.

// 10 — READ BEFORE THE ROUND

THE IN-TRAY · ONE MINUTE

Make the call on one file.

A short file on the ground this page covers. Every option opens with how far it sits from a senior banker’s read.

THE NUMBER · THE BANK · ASSET QUALITY

A bank's annual report gives three figures for its loan book.

Gross loans
US$10bn
Non-performing loans
US$300m
Provisions held
US$180m

What is its provision coverage of non-performing loans?

1 FILES · PICK A CALL ON ANY OF THEM

5 MORE ON THE BANK · ASSET QUALITY →WHERE DO YOU READ FROM? THE PLACEMENT →

// THE FREE CASE

FREE · NO PURCHASERead one complete case first Case 01 of the interview case pack — Northmark Engineering, the file, the diagnostic and the ninety-second walkthrough — in full, for an email address.10-PAGE PDF · FREE

// ALSO IN THE CREDIT LINE

The whole board, and how the four blocks fit together, is on what jobs banks hire for.