// EXAM HALLSITUATIONAL JUDGEMENT

Banking Situational Judgement Practice

A working situation, four things you could do, and a call to make before you read anything.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-02

// THE SHORT ANSWER

A banking situational judgement test puts you in a working situation and asks what you would do, then scores your choice against how experienced staff would act. It tests how you behave with client confidences, conflicts of interest, inside information, suspicious activity and pressure from a client or a manager, not what you have memorised. This paper runs original files in that shape, none from any bank's test. Make each call first; every option then shows how far it sits from a senior banker's read, with the reason.

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.

The first files are for any seat in a bank; the later ones say whose they are. The page never says right or wrong: each option opens with how far it sits from a senior banker’s read. Nothing you pick here is sent to a bank or shown to anyone.

ANY SEAT · CONFIDENTIALITY · THE CALL

Over lunch, one of your clients asks about a competitor that is also your client: 'I hear they're struggling. Are they?'

Your answer?

ANY SEAT · CONFIDENTIALITY · THE CALL

A journalist calls and asks you to confirm that a well-known client has breached its loan covenants. 'Everyone knows,' she says.

Your move?

ANY SEAT · CONFLICTS · THE CALL

A borrower whose loan you are about to recommend sends you two tickets to a final, worth about US$1,000.

Your move?

ANY SEAT · CONFLICTS · THE CALL

Your partner is a director of a company that has just applied to your bank for a loan, and the file has been assigned to you.

Your move?

ANY SEAT · INSIDE INFORMATION · THE CALL

A listed borrower tells you in confidence that it will announce a large loss next week. A friend asks whether they should sell their shares in it.

Your move?

ANY SEAT · INSIDE INFORMATION · THE FIRST QUESTION

In a credit meeting, a listed client mentions it is in talks to buy a competitor. The talks are not public.

What do you do first after the meeting?

ANY SEAT · INSIDE INFORMATION · THE CALL

You bought shares in a company last month, before joining the team that lends to it. You have now been given its file, including unpublished forecasts.

Your move?

ANY SEAT · FINANCIAL CRIME · THE CALL

You have reported a client's transactions as suspicious. The client calls and asks why its new payments are being held.

Your answer?

ANY SEAT · FINANCIAL CRIME · THE FIRST QUESTION

A new business client is owned by a company in another country, which is owned by a trust whose beneficiaries are not disclosed.

What do you ask first?

CLIENT SEATS · FAIR DEALING · THE CALL

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?

CLIENT SEATS · FAIR DEALING · THE CALL

Two clients want the last of a limited fixed-rate funding scheme the bank is offering. One is your largest relationship; the other applied first and qualifies equally.

Your move?

CLIENT SEATS · FAIR DEALING · THE CALL

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?

CREDIT SEATS · INDEPENDENCE · THE CALL

The bank's advisory team helped a client build the forecast in its loan application. The credit team is now asked to rely on that forecast.

Your move, as credit?

CREDIT SEATS · INDEPENDENCE · THE CALL

Writing a credit paper for a client you want to win, you find a covenant breach at its previous bank that the client did not mention.