Financial Institutions (FIG) — Investment Banking Mock Interview
Build fluency in bank income statements, NIM and efficiency ratios, insurance combined ratios, and advanced topics like the Residual Income Model, LCR/NSFR, and bank M&A mechanics.
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Key Topics Covered
Bank Income Statement, NIM & Capital Ratios
Walks through how bank revenue flows from Net Interest Income through provisions to net income, explains why NIM compresses under yield curve inversion as banks borrow short and lend long, and covers CET1 as the binding constraint on lending, growth, and capital returns.
FIG Valuation: P/TBV, ROTCE & the Residual Income Model
Explains the direct correlation between ROTCE and P/TBV where banks earning above their cost of equity trade at premiums to book, and derives the Residual Income Model formula showing that value equals book value plus the present value of future excess returns.
Insurance: Combined Ratio, Float & Embedded Value
Covers the Loss Ratio plus Expense Ratio framework for P&C underwriting profitability, explains why float is essentially a negative-cost loan from policyholders, and walks through Embedded Value for life insurers as Adjusted Net Worth plus Value of In-Force Business.
Bank M&A: Rate Marks, CDI & TBV Earnback
Details how rising rates create fair value write-downs on acquired loan books that cause TBV dilution, the role of Core Deposit Intangibles and their amortization in GAAP versus cash EPS, accretable yield mechanics, and why the TBV earnback period is the critical board metric in bank deals.
Fintech, Neobanks & Regulatory Risk
Explains neobank interchange-based revenue models, why fintech lenders get re-rated from tech to bank multiples when the market recognizes balance sheet credit risk, Payment for Order Flow conflicts at brokerages, and the LCR/NSFR liquidity framework that distinguishes solvency from liquidity.
How to Prepare for Financial Institutions (FIG) Interviews
Memorize why the unlevered DCF fails for banks: deposits and debt are the raw materials of a bank's business, making interest expense effectively COGS and WACC meaningless. Be ready to explain that equity-level methods like the DDM and P/TBV are used instead, with cost of equity as the discount rate.
Understand the Residual Income Model at an intuitive level: a bank trading at exactly one times book value implies the market expects ROE to equal the cost of equity with zero excess return. The advanced session tests this exact scenario, and interviewers use it to see if you understand the economic logic behind book value multiples.
Prepare to discuss the rate mark in bank M&A, which the advanced session identifies as a deal-killer in rising rate environments. Know that a rate mark on fixed-rate loans pushes the TBV earnback period beyond acceptable thresholds, explaining why bank M&A activity declines when rates rise sharply.
Be able to distinguish calendar-year from accident-year loss ratios in insurance. The advanced session explains cookie jar reserve release accounting where over-reserving in good years and releasing in bad years masks deteriorating underwriting performance, and this is a common FIG interview topic.
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About This Financial Institutions (FIG) Mock Interview
These sessions cover the full FIG landscape across banks, insurance, asset management, and fintech. The basic session walks through why unlevered DCFs are inappropriate for banks, the bank income statement structure from NII through provisions to net income, NIM and the Efficiency Ratio, yield curve inversion impact, CET1 capital constraints, the provision for credit losses cycle, P/TBV versus ROTCE valuation, the combined ratio and float in insurance, P/AUM for asset managers, neobank interchange models, and payment processor valuation. The advanced session pushes into the Residual Income Model linking excess ROE to P/B premiums, levered DCF construction for banks, LCR and NSFR liquidity regulation including the Silicon Valley Bank parallel, Embedded Value and statutory strain in life insurance, the rate mark on acquired loan books that can kill bank deals, Core Deposit Intangibles, accretable yield versus non-accretable difference, double leverage at bank holding companies, cookie jar reserve release accounting, fintech re-rating risk, PFOF conflicts, and a full bank M&A advisory framework.
This topic is part of the Industry Verticals section of our investment banking mock interview library. It includes 2 sessions covering both basic and advanced difficulty levels. Each session includes multi-speaker audio with realistic interviewer questions and candidate responses, plus a full interactive transcript you can follow along with or study independently.
Audio Recording
36 minutes of multi-speaker audio
Full Transcript
Interactive transcript with timestamps
1 Basic + 1 Advanced
Basic & Advanced
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Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
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Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
Analyst
The IB Vine technical prep is beyond helpful, it's so much more fun quizzing myself every now and then vs. reading through the guides again.
Analyst
I personally found that the 'IB Vine Select' collection had some of the exact questions I was asked in my Qatalyst interviews.
Analyst
Thanks for starting up IB Vine. Couldn't have landed my offer without your help!
User Story
I honestly think you're doing gods work since IB Vine democratizes the whole interview process and helps a lot of students ace their interviews.
Analyst
I found this website really helpful, which also helps me better prepare for the technical interview in IBD position and get an offer.
Seen on WallStreetOasis
Check out IB Vine, specifically the 'IB Vine Select' questions. Once you can get a handle of those, it seems like you are in a spot where you're applying the concepts rather than simply memorizing them
Analyst
I've used IB Vine for my recruitment, and I could not imagine the journey without it. Thank you for creating a phenomenal resource.
Seen on WallStreetOasis
Beyond the 400 questions guide, try to understand a deeper level and the underlying concepts of the questions being asked. Use ibvine, it really helps.
Seen on WallStreetOasis
IB Vine has excellent questions, especially multistep ones. In my experience I've gotten grilled on accretion/dilution, bond math, and merger model questions. IB Vine has great practice for all of those.
User Story
As a nontraditional transfer student who has been rendered unavailable to many resources at my university (Leadership positions at clubs, immediately behind the recruiting cycle, etc.) IB Vine has been an absolute game changer in my IB prep.
Seen on WallStreetOasis
From my experience interviewing FT for IB, it’s not enough to just know the 400 questions anymore (it’s a good starting point) but to look at even more advanced questions. Would recommend IB Vine.
Seen on Twitter
heard all the new kids use IB Vine now. the questions on IB Vine helped me get the concepts down when I had to recruit and make a lot of BB/MM interviews easier than I expected for techs
User Story
Just got off the phone with a kid who interned at a Dallas PE firm. He mentioned that IB Vine helped him secure that internship as well as his Summer Analyst offer, especially since he came from a non-target with no resources.
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