Investment Banking Interview Questions: A Graduate Guide

What to Expect From a Graduate Investment Banking Interview

Investment banking graduate interviews typically unfold across several stages: an online application, a numerical or situational judgement test, a video interview, and one or more final-round interviews — which may include a case study or group exercise. Many banks use one-way video interview platforms early in the process, where you record answers to pre-set questions within a strict time limit, with no interviewer present.

The full process usually assesses three broad areas: technical knowledge (accounting, valuation, financial markets), commercial awareness (current deals, macro trends, sector news), and competency or behavioural fit (teamwork, resilience, motivation). Understanding which area each question targets lets you prepare a far more precise answer.

The Most Common Competency Questions — and How to Answer Them

Competency questions ask you to draw on real past experience to demonstrate specific skills. Banks commonly assess drive, analytical thinking, working under pressure, teamwork, and commercial instinct. Use the STAR method — Situation, Task, Action, Result — to structure every answer. Keep it concise: aim for 90–120 seconds when speaking, or roughly 200–250 words in writing.

Example question: 'Tell me about a time you worked under significant pressure to meet a deadline.' A weak answer describes the situation vaguely and jumps to a happy outcome. A strong STAR answer looks like this: Situation — 'During my second year, my team of four had a 48-hour window to submit a 6,000-word consulting project after one member dropped out.' Task — 'As de facto project lead, I had to redistribute work, maintain quality, and keep morale up.' Action — 'I mapped all remaining tasks against available hours, had a frank conversation with the team about priorities, and cut two peripheral sections we agreed were non-essential. I then worked through one night to complete the financial analysis section.' Result — 'We submitted on time and received a distinction. The experience taught me to triage ruthlessly and communicate transparently when under pressure — skills I know are essential in a banking environment.'

• Why investment banking? — Assess your genuine motivation; vague answers about 'being good with numbers' will not impress.
• Tell me about yourself — A 60-second narrative linking your background, relevant skills, and why you're here.
• Describe a time you influenced someone without authority — Tests leadership and persuasion.
• Give an example of when you used data to make a decision — Tests analytical thinking.
• What is your greatest weakness? — Be honest, specific, and show what you are actively doing about it.

Technical Questions Every Graduate Should Prepare

Technical questions vary by role and bank, but graduates interviewing for investment banking analyst positions should be comfortable with core concepts. You do not need to be a chartered accountant, but you must demonstrate genuine intellectual engagement with financial concepts rather than surface-level knowledge.

Walk me through a DCF: Explain that a Discounted Cash Flow values a business by projecting its free cash flows and discounting them back to present value using a weighted average cost of capital (WACC). Mention that the terminal value typically makes up the majority of the total valuation, and that assumptions around the discount rate and growth rate are the key sensitivities to stress-test.

What are the three financial statements and how do they link? The income statement shows revenue and profitability; the balance sheet shows assets, liabilities, and equity at a point in time; the cash flow statement reconciles net income to actual cash movement. A common linking question: 'If depreciation increases by £10, walk me through the impact.' Net income falls by £10 × (1 – tax rate); cash tax paid decreases; depreciation is added back on the cash flow statement; PP&A on the balance sheet decreases by £10.

• Know the three main valuation methodologies: DCF, comparable company analysis (trading comps), and precedent transactions.
• Understand enterprise value vs equity value and when each is used.
• Be able to explain why a company might choose debt over equity financing.
• Know at least one live M&A deal and be able to discuss the strategic rationale.
• Understand basic accounting: EBITDA, working capital, and free cash flow.

Commercial Awareness: How to Stand Out

Every bank expects graduate candidates to follow financial news actively. Commercial awareness questions are not a test of how many headlines you have read — they test whether you can analyse, not just recall. When asked about a recent deal or market trend, structure your answer around: what happened, why it matters, what the risks or opportunities are, and what you would watch next.

A strong answer to 'Tell me about a recent deal that caught your attention' might reference a publicly announced acquisition in the sector you are applying to cover, explain the strategic rationale (e.g., vertical integration, market share, entering a new geography), acknowledge the valuation or financing method used, and then offer a brief personal view on whether the deal makes sense. Practise this format so it becomes second nature before interview day.

• Read the Financial Times, Bloomberg, and The Economist regularly in the weeks before your interview.
• Follow at least one sector closely — know two or three companies, their competitors, and a recent transaction.
• Understand the current interest rate environment and its effect on deal activity and valuations.
• Prepare views on at least one IPO, one M&A deal, and one macroeconomic trend.

How to Perform Well in One-Way Video Interviews

One-way video interviews — used heavily at the screening stage — are uniquely demanding because you are speaking to a camera with no human reaction to guide you. Banks use these to assess communication clarity, confidence, and structured thinking under time pressure. Questions are typically displayed on screen, you are given a short preparation window (often 30–60 seconds), and then you must record your answer within a set time — commonly 90 seconds to two minutes.

The most common mistakes are speaking too fast due to nerves, failing to use a clear structure, and spending the entire time on the Situation and never reaching the Result. Practise aloud, on camera, with a timer. Using a tool like ScreenReady — which simulates timed one-way video interviews and gives AI-generated feedback on your answers — can help you identify filler words, pacing issues, and whether your STAR structure is landing clearly before the real thing.

• Test your camera, microphone, and lighting before the actual interview.
• Dress professionally — assessors can see you.
• Use brief notes if permitted, but do not read from a script.
• Pause for one to two seconds before answering; it looks considered, not slow.
• End every answer with a clear Result or takeaway — do not trail off.

Questions to Ask Your Interviewers

Asking strong questions signals genuine interest and intellectual curiosity — both valued in banking. Avoid questions whose answers are on the bank's website. Instead, ask about the interviewer's own experience, team culture, the type of deals the division is currently working on, or what distinguishes high performers in the analyst class.

Avoid asking about salary, hours, or promotion timelines at early interview stages. Save logistical questions for HR. The best questions are specific, show you have done your research, and invite a real conversation. For example: 'You mentioned the team recently advised on a cross-border deal in the renewables sector — is that a space the division is actively building out?'

A Pre-Interview Preparation Checklist

Systematic preparation consistently separates candidates who are merely bright from those who actually secure offers. Use this checklist in the two weeks before your interview to make sure every area is covered.

• Practise at least five STAR answers aloud, on camera, under timed conditions.
• Revise DCF, trading comps, the three financial statements, and enterprise value.
• Research the specific bank: recent deals, stated strategy, culture, and any news.
• Prepare two to three commercial awareness examples with your own analysis.
• Rehearse your 'Why investment banking?' and 'Why this bank?' answers until they feel natural, not rehearsed.
• Use ScreenReady or a trusted peer to simulate a full mock interview and get structured feedback.
• Prepare three strong questions to ask the interviewer.