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// EXAM HALL23 QUESTIONS · 30 MINUTES

Relationship Manager Practice Test

Read the client's numbers, work through one client meeting, and make the calls the seat makes.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A relationship manager practice test asks whether you can read a client's business and hold a commercial conversation, not only whether you can sell. This paper has three parts: the client's numbers, one client meeting worked through from a visit note, and the calls the seat makes on price, conduct and telling a client no. Every question is original, and none comes from any bank's test. Sit it against a thirty-minute clock with the reads held to the end, or take it as practice; each option then shows how far it sits from a senior banker's read.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// HOW TO SIT IT

Answer below as practice, and each read opens as you go. Or sit it as a test: 30 minutes, with every read held back until you finish.

PART A

The client's numbers

A relationship manager does not need the analyst's spreadsheet, but does need these in their head across the table.

PART A · QUESTION 1

A wholesaler asks to size its working capital line.

Debtor days
55
Stock days
70
Creditor days
40
Sales a day
US$100k

What is its cash conversion cycle?

PART A · QUESTION 2

A supplier offers its customers 2% off for paying in 10 days instead of 40.

Roughly what annual rate is the supplier paying to be paid early?

PART A · QUESTION 3

A bakery sells 150,000 units a year at an average of US$10 each. Variable costs are US$6 a unit and fixed costs US$400k a year.

How far can its sales fall before it makes a loss?

PART A · QUESTION 4

A US$2m machine is expected to save US$400k of cash a year. The borrower asks for a three-year loan to buy it.

How long does the machine take to pay for itself?

PART A · QUESTION 5

A company asks to refinance. Its year in four numbers:

EBITDA
US$6m
Capex + tax
US$2m
Interest
US$1m
Principal due
US$2m

What is its debt service cover, on cash available after capital spending and tax?

PART A · QUESTION 6

A US$5m five-year term loan. The margin is 2.2% a year, and the borrower pays a 0.5% establishment fee at the start. Ignore repayments, and spread the fee evenly.

What does the bank earn from it each year, before costs and expected loss?

PART B

The meeting

One client, eight questions, in the order the meeting runs. Read the visit note first.

EXHIBIT C · THE VISIT NOTE

A family-owned food distributor, banked here for six years, with revenue of US$18m last year. Facilities: an overdraft limit of US$1.5m and a term loan of US$2.0m. The owner, 62, runs sales. His son joined as general manager last year.

The owner has asked to meet. He wants the overdraft raised to US$2.5m for a new supermarket contract worth US$4m a year. He says sales are up 12%, and that a rival bank has offered 40 basis points less.

What the bank's own systems show, this year. Figures in US$000.
Q1Q2Q3Q4
Overdraft, average drawn6207609801,270
Overdraft, peak drawn1,0501,2901,4401,530
Days over the limit0006
Money paid into the account4,7004,6004,1003,800
Management accountsOn timeOn time2 weeks late3 weeks late
PART B · QUESTION 7

From Exhibit C: you have fifteen minutes to prepare, and the owner says sales are up 12%.

Which line worries you most?

BACK TO EXHIBIT C ↑
PART B · QUESTION 8

From Exhibit C: you sit down with the owner and his son. He opens by saying the rival will do it cheaper.

What do you say first?

BACK TO EXHIBIT C ↑
PART B · QUESTION 9

From Exhibit C: the contract is worth US$4m a year on 60-day terms. Cost of sales is 80% of revenue. The distributor holds 20 days of stock for it and pays suppliers in 30 days.

About how much working capital does the contract itself tie up?

BACK TO EXHIBIT C ↑
PART B · QUESTION 10

From Exhibit C: the contract needs about US$570k, the request is US$1.0m, and the overdraft has averaged more every quarter this year.

What do you ask about the other US$430k?

BACK TO EXHIBIT C ↑
PART B · QUESTION 11

From Exhibit C: late in the meeting the son, who has said little, mentions: 'We've started using the rival for card receipts. Dad thinks it's just a trial.'

What do you hear?

BACK TO EXHIBIT C ↑
PART B · QUESTION 12

From Exhibit C: he says, 'Just tell me today. Can you do the US$2.5m?' You think a smaller increase may work, and you do not hold the authority.

What do you say?

BACK TO EXHIBIT C ↑
PART B · QUESTION 13

From Exhibit C: writing your note to credit, you know the six days over the limit and the falling receipts weaken your case. Neither is in the client's own pack.

What do you do with them?

BACK TO EXHIBIT C ↑
PART B · QUESTION 14

From Exhibit C: credit approves US$2.1m for twelve months, not US$2.5m, with monthly debtor reports, and wants the falling receipts explained. You call the owner this afternoon.

How do you put it?

BACK TO EXHIBIT C ↑

PART C

The calls

Price, conduct and the honest answer, with a client on the other end of the phone.

PART C · QUESTION 15

A rival bank offers your borrower a margin 50 basis points below yours on a five-year term loan: same security, same covenants. The borrower is sound and wants an answer this week.

What do you check before deciding whether to match?

PART C · QUESTION 16

During negotiation a borrower's owner twice reopens agreed terms at the last minute and goes over your head to your manager. The credit itself is strong.

Your move?

PART C · QUESTION 17

A fast-growing borrower now needs export finance, currency hedging and a syndicated loan. You are a relationship manager at a regional bank that does none of them well.

What is the honest question?

PART C · QUESTION 18

A long-standing client asks for a small US$300k equipment loan. Priced on its own, the margin barely covers your cost. The client also keeps US$4m on deposit and uses a trade finance line with the bank.

How do you price it?

PART C · QUESTION 19

A small exporter asks for a currency hedge. The product that pays the bank most is a complex option strategy; a simple forward would meet the client's need.

What do you offer?

PART C · QUESTION 20

Six months after you sold a client an interest rate hedge, you learn that the loan it hedged has been repaid early. The client hasn't mentioned the hedge.

What do you do?

PART C · QUESTION 21

An importer with a floating-rate loan fears that rates will rise, and asks about an interest rate swap.

Before it signs, what does it most need to understand?

PART C · QUESTION 22

You tell a founder: 'We'd want the covenant package tightened before we extend.'

What does the founder hear?

PART C · QUESTION 23

A borrower who has paid on time for nine years asks to move its monthly management accounts to quarterly.

Signal or noise?

0 OF 23 ANSWERED · 0 WITH THE SENIOR READ · 0 STANDS UP · 0 OFF THE LINE

// THE REST OF THE ROUND

Every question here is original; none is any bank's real test. Written for: Business relationship manager, Corporate coverage banker, Agribusiness manager.