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D. Neil Berdiev
D. Neil Berdiev
Title: Managing Partner, Co-founder, DNB Advisory LLC
Age: 39
Experience: 18 years
Neil Berdiev never intended to make a career out of commercial banking. He originally got into the financial industry on the brokerage side of the house, at Fidelity, but when a colleague suggested he give commercial banking a whirl, he found that that business engaged his analytical brain just as well. Recently, he struck out on his own with DNB Advisory, where he focuses much of his energy on training and development in the commercial banking space. When he’s not helping bankers look at the bigger picture, Berdiev, appropriately, enjoys planting trees.
Q: What’s the key client base in your current gig?
A: I work mostly with commercial banks. Those are my initial key clients and then the broader financial services industry. I do a variety of work and this is why I call it advisory. I would say probably a good 50 percent of what I do is training and development, everything from junior staffers to more experienced and seasoned, even training for board members, but I approach it in a highly customized way specific to each bank’s need. Training is a very commoditized product, so my value is in getting them to where they need to be depending on their problems, depending on their issues.
Q: Everybody’s been talking about the commercial lending landscape and how competitive it is right now. What are your thoughts on that?
A: The biggest question I think every banker worries, or at least should worry about, is when another downturn happens. Prior recessions, they’ve run, at most, once about every 10 years. We’re approaching that point. You know, it could be a softer recession, but we haven’t truly had a proper recovery.
If I were to speak to all the borrowers, I would always urge them to think about it, particularly those that are not really able to get capital easily from the capital markets. We’re talking your traditional smaller business to lower-mid tier companies.
But when the economy takes a downturn, banks tend to become very protective because they need to protect their depositors’ money. So those who are getting the cheapest deal with no covenants, they need to be prepared for banks to come in and try to protect their depositors, their capital. The deal that looks very attractive now? I bet it’s not going to look very attractive when the downturn strikes – and the bigger the downturn, the more aggressive banks will be with their recoveries.
Q: You also have a specialty in specialties. That is to say, helping banks develop niches. What’s heating up in that space right now?
A: Private banking is becoming more and more popular, although based on what I’ve seen few banks truly do it well. Others kind of dabble in private banking. But there are a few names in town who do it very well. So private banking is hot, popular, but by my assessment, not really done well consistently.
When you invest in a specialty, you need to figure out, do you want to be in it for long? And the tendency, although it’s not true for larger banks in particular, is they get into a specialty, but if things are not looking good, they may pull out of it. What happens in those instances is, once borrowers and your centers of influence find out that you’re no longer in that space, it takes years before you can shake off that reputation.
Other specialties are becoming more mainstream. … Asset-based lending, especially mid-sized to larger banks, they’ve either had asset based lending or they’re getting those units. Banks with $1 billion in assets and up, they are actually sometimes hiring asset-based lenders from larger institutions because they see it as a niche.
You can make anything a niche, to be honest. … The question is, how large is your portfolio? How much of this specialty portfolio do you want to book in loans? Because if there is a limit compared to your overall portfolio, the bigger your specialty portfolio, the more there is a risk. There’s a lot that happens behind the scene when banks are deciding to enter a niche.
Berdiev’s Five Favorite Trees To Plant:
- Oak
- Maple
- Birch
- Beech
- Weeping willow
