Internships - the way into a job

Banks increasingly seek to recruit graduate trainees from among students who have done internships first.

Citigroup's head of recruitment, Lesley Wilkinson, says: 'We plan to focus more on internships as a source of new recruits, as they are a good way of getting a feel for the quality of candidates and allowing them to get a feel for us.'

Although closing dates for internship applications are generally February - March, many places are offered on a first come, first served basis.

So the sooner an application is in, the better. Competition is stiff: at Citigroup, only 5% of would-be interns made the grade last summer.

The demise of dot-coms and reduced demand for graduate recruits at management consultancies, which compete with investment banks for top students, means the number of applicants to investment banks is rising.

At UBS Warburg Heidi Plant, head of graduate recruitment, says: 'We have 25% more applicants than last year'. With more candidates to filter, Plant says the bank has started using an assessment centre instead of solely interviews to select summer interns.

Internships are likely to remain a popular method of selecting candidates. In 2003 UBS Warburg, for example, plans to fill at least 40% of its full-time graduate positions through the internship programme, the same proportion as 2002. At some other banks theproportion is higher.

Unless market conditions improve, Plant says it is quite likely that 2002 interns at UBS Warburg will be chasing fewer jobs than their counterparts in 2001.

At the same time, some banks are raising the academic threshold: the offer of a graduate place following a successful internship is usually conditional on good exam results and achieving at least a 2.1 degree in the UK has become virtually mandatory.

One student at the London School of Economics did a successful internship with one bank during the summer of 2000; the bank offered him a full-time place for 2001 but withdrew its offer several days before he was due to start when it discovered he had achieved only a 2.2. .

Prospective interns should conduct research into banks and the activities of their various sectors as, invariably, you will be asked to select a division when applying and most banks are unwilling to let interns move around.

'Investment banking' is the most popular department as candidates assume it includes everything - not always the case as department titles vary between banks, so it's worth ensuring you know exactly what the name encompasses before applying.

Assuming you're successful in your application for an internship, what can you expect? The short answer is: hard work. In departments such as corporate finance, interns invariably start at 8am and finish at 8pm; if a deal demands it, they may even work the weekend - for some it is too much.

However, if you're attracted to a career in investment banking it will be worth it. Internships offer an incomparable opportunity to sample the profession.

After a week's introduction to the fundamentals, training is usually on-the-job. Interns are assimilated into teams of investment bankers and given real work. Quite how real will depend upon the department: interns in sales and trading, for example, are not FSA-regulated and so are constrained in activities undertaken.

It appears easier to progress from being an intern to a graduate hire at some banks than others.

Following the introduction of a rigorous new assessment centre, only 30% of SSSB's investment banking interns were converted into graduate offers in 2001, whereas at JP Morgan some 75% of 2001 interns were invited to become graduate trainees. At Deutsche Bank the rate was 55%.

In return for sacrificing a summer, an intern gains responsibility and, if offered a graduate place, an invaluable aid during his/her final year.

While fellow students do the 'milk round', the successful intern can focus on getting a good degree. Some banks even allow candidates to defer graduate entry for a year, so the lost summer can be more than recovered when exams are over.

For those who do not progress from intern to full-time hire, there is a consolation: some banks at least pay interns well. At US and first-tier European banks, the going rate in London is 400-450 a week; second tier banks are less generous, and some smaller European firms pay summer interns a mere 250.