Jacob Watson
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Jacob Watson: Looking beyond the balance sheet within Credit Risk

Jacob Watson enjoys the exposure he has to Macquarie’s unique commodities trading business through his role as a Credit Risk Analyst with the Risk Management Group. He joined Macquarie’s London office on the Graduate Programme in 2020 and says the opportunities to work in a team with senior staff have been a great foundation for his career. 

 

In 2020, Jacob Watson joined Macquarie’s Graduate Programme in the London office, working in the Risk Management Group (RMG).

Jacob always wanted a career in finance, after graduating with an undergraduate degree in Politics, Philosophy and Economics (PPE) and undertaking a Masters in Economics, he was drawn to banking because of the wider economic vantage point it offered.

One of the main reasons Macquarie appealed to him was its activity in the commodities space, where he’s now carving out his career as a Credit Risk Analyst, assessing risk for the trading side of Macquarie's commodities business.

“It is unique for a bank to be so involved in commodities, and that appealed to me because areas of specialism like agriculture and oil are very tangible and physical, and that keeps it interesting,” Jacob said. “It’s one of the things that made Macquarie stand out from the other banks.”

“I was also looking for a graduate scheme where I would enter my preferred team from day one and have the people I was working with invested in me, while also having the ability to learn from them.” 

 

Analysing commodities credit risk  

“I’m on the trading side and, within that, we manage commodities such as agriculture, oil and metals.”

Jacob says his team looks at potential default rates for commodities clients. They then provide this information to traders who may be physically trading agricultural commodities or hedging price risk.

“The riskier the client, the less credit risk we would want to take on them,” he explains. “My main specialities are Middle Eastern oil and Brazilian agriculture. I have needed to spend time developing expertise in these sectors, in order to understand their operations.”

From comparing agriculture yields to assessing weather events or how the harvest is going in Brazil, Jacob enjoys the breadth and depth of the work, and the opportunity it provides to build up knowledge in specific sectors, as well as in politics and related world affairs.

For agriculture, he’s looking at the risk of portfolio clients that range from farming companies to sugar mills and counterparties, such as food manufacturers that consume agricultural products.

“Agriculture in Brazil is a colourful and volatile jurisdiction, with different risks like weather or politics,” Jacob says. “While for oil in the Middle East I’m typically dealing with legal risk considerations.” 

 

Looking beyond the balance sheet  

Typically, Jacob begins his day by handling requests from the desk. “Most of my time is spent on annual reviews and reports on the credit worthiness of counterparties, so I’ll be analysing their financials, talking to the client and understanding their business,” he explains.

Jacob also assesses the risk and reward of approval requests from the trading desk.

“Requested work from traders often relates to increasing limits, so it is fast paced, and cumulatively I feel like I’ve achieved a lot,” Jacob says. “I really like the interaction with the sales people and exposure to that part of the business.”

“I’m never looking at one specific thing, it’s varied,” he explains. “It’s not just balance sheets. For Brazil, my job is actually understanding how these crops are grown.”

 

Benefiting from exposure to senior staff 

Jacob is keen to dispel the common myth that, in finance, risk is merely a box ticking exercise. “Risk is integral at Macquarie,” he says.

Jacob says a highlight of his time so far has been the ownership, responsibility, and autonomy he has over his work.

“I have my own portfolio of counterparties and I need to be across them, and I am empowered to make key decisions,” he explains. “Even at a junior level you know if you make a decision your team has your back, and you have the ability to push back.”

As part of the Graduate Programme, Jacob has enjoyed grad events and regular coffee catch-ups. He has also been mentored by a senior team member in an adjacent division.

“There are tonnes of opportunities at Macquarie, plenty of support and extracurricular groups to join,” Jacob says.

“While it was challenging working from home during the pandemic, everyone was friendly and helpful. We have had daily team calls and my manager is always available for questions. It’s easy to reach out.”

Jacob says being keen to learn and being able to listen to and act on feedback are key skills for any graduate, while other knowledge is developed on the job.

“I hadn’t done an internship, so it was my first time working for a large organisation, and it felt like it was a steep learning curve.”

“Initially it was also hard to benchmark myself and be able to tell if I was doing a good job. But from a career perspective, the fact that everyone else in my team is more senior has been very beneficial for exposure and learning.”

Right now, hybrid working means he’s back in the office and enjoying networking with people in the wider organisation face-to-face.

“Macquarie’s flat structure and hotdesking system means that you may end up sitting next to someone very senior like a division head,” Jacob explains. “It benefits from being a large enough organisation to provide you with all the opportunities you could ever want, but without the fear of getting lost or having too much bureaucracy.”

Jacob gets to help out his colleagues with specialisations in other areas, gaining exposure to other fields. Travel is also on the horizon, so he can better understand his clients, markets and regions. Later this year he will attend a graduate induction in Sydney, which was delayed due to the pandemic.

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