International Capital Market

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International capital market is that financial market or world financial center where
shares, bonds, debentures, currencies, hedge funds, mutual funds and other long term securities
are purchased and sold. International capital market is the group of different country's capital
market. They associate with each other with Internet. They provide the place to international
companies and investors to deal in shares and bonds of different countries.

After invention of computer and Internet and revolution of financial market in 2010, almost all
financial markets are converted in international capital markets. We can give the example of
Hong Kong, Singapore and New York world trade centre. International capital market was
started with dealing of foreign exchange. After globalization of financial sector, companies have
to take certificate for dealing in international market. Suppose, Indian company wants to sell
shares in France, for this, Indian company should take certificate named global depository
receipt (GDR).

International capital market's daily turnover has crossed $ 5 trillion. International capital market
is very helpful for reducing the risk of small company because in international market, you can
buy different countries companies shares, debentures and mutual funds. Different countries have
different business environment, so if any country is facing loss and due to financial crisis, your
investment in that country may suffer losses but you can fulfill this loss from other country's
investment. So, overall risk will be reduced by this technique.

Suppose, a company wants to invest its money, then it is good option, that A company must
invest it in international market. It can invest with following way and make his best portfolio:

a) A company can buy 10000 shares of USA Company.

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b) A company can buy 10000 shares of Indian company.
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c) A company can buy 10000 bonds of UK Company.
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d) A company can also invest in the mutual funds of Pakistan or USA or Canada.

INTERNATIONAL BANKING

International Banking Defined International Banking is a process that involves banks dealing with money
and credit between different countries across the political boundaries. It is also known as
Foreign/Offshore Banking. In another words, International Banking involves banking activities that cross
national frontiers. It concerns the international movement of money and offering of financial services
through off shore branching, correspondents banking, representative offices, branches and agencies,
limited branches, subsidiary banking, acquisitions and mergers with other foreign banks. All the basic
tools and concepts of domestic bank management are relevant to international banking. However,
special problems or constraints arise in international banking not normally experience when operating at
home. In particular: Business activities have to be transacted in foreign languages and under foreign laws
and regulations. Information on foreign countries needed by a particular bank wishing to operate
internally may be difficult to obtain. Control and communication systems are normally more complex for
foreign than for domestic operations. Risk level may be higher in foreign markets. Foreign currency
transaction is necessary. International bank managers require a broader range of management skills than
managers who are concerned only with domestic problems. It is more difficult to observe and monitor
trends and activities in foreign countries. Larger amounts of important work might have to be left to
intermediaries, consultants and advisers. International banking deals with all banking transactions-
private and governmental- of two or more countries. Private Banks undertake such transactions for
profit; governments may be for provision of various services.

Reasons for Engaging in International Banking

Banks undertake international operations in order to expand their revenue/profit base, acquire
resources from foreign countries, or diversify their activities. Specific reasons expanding operations
abroad include the saturation of domestic market; discovery of lucrative opportunities in other
countries; desire to expand volume of operations in order to obtain economy of scale. Further motives
for operating internationally are as follows:
 Commercial risk can be spread across several countries
 Facilitation of international businesses and trade
 Involvement in international banking can facilitate experience curve effect
 Economies of scope might become available
 Reduce cost of service delivery
 Recognition and reputation
Role of International Commercial Banks in Developing Countries

While in foreign developing countries, international banks besides performing the usual commercial
banking functions play an effective role in their economic development. These roles include the
followings.

 Mobilization of Savings for Capital Formation International commercial banks help in

overcoming savings through a network of branch banking. People in developing countries have
low incomes but the banks induce them to save by introducing varieties of deposit scheme to
suit the needs of individual depositors. They also mobilize idle savings of the few rich. By
mobilizing savings, the banks channel them into productive investments. Thus, they help in
capital formation of a developing country.
 Financing Industry The international commercial banks finance the industrial sector. They
provide short time, medium-term and long-term loans to industries. Besides, they underwrite
the shares and debentures of large scale industries. Thus, they not only provide finance for
industry but also help in developing the capital market, which is underdeveloped in such
countries.
 Financing Trade The international commercial banks help in financing both internal and external
trades. The banks provide loans to retailers and wholesalers to stock which they deal. They also
help in the movement goods from one place to another by providing all types of facilities such as
discounting and accepting bills of exchange. Moreover, they finance both exports and imports of
developing countries by providing exchange facilities to importers and exporters.
  Financing Agriculture The international commercial banks help the large agricultural sector in
developing countries in a number of ways. They provide loans to traders in agricultural
commodities. They provide finance directly to agriculturists for the marketing of the
modernization and mechanization of their farms, for providing irrigation facilities and for
developing lands. Help in Monetary Policy: The international commercial banks help in economic
development of a country by faithfully following the monetary policy of the country¶s central
bank. In fact, the central bank depends upon the commercial banks for the success of its
monetary management in keeping with requirement of a developing economy.

MAJOR INTERNATIONAL BANKS

1. Industrial and Commercial Bank Of China Ltd. (IDCBY)

 Revenue (TTM): $143.32B

 Net Income (TTM): $55.34B
 Market Cap: $173.9B
 1-Year Trailing Total Return: -2.9%
 Exchange: OTC

The largest bank in the world in terms of total assets under management
(AUM) as well as gross revenues is the Industrial and Commercial Bank Of
China Ltd. This institution provides credit cards and loans, financing for
businesses, and money management services for companies and high net
worth individuals. Though this is a commercial bank, it is state-owned.

2. China Construction Bank Corp. (CICHY)

 Revenue (TTM): $126.79B

 Net Income (TTM): $48.49B
 Market Cap: $148.5B
 1-Year Trailing Total Return: -4.5%
 Exchange: OTC

The second Chinese bank on our 10 biggest list is China Construction Bank
Corp is also the second-largest worldwide. It provides corporate banking
services such as e-banking, credit lines, and commercial loans. China
Construction Bank also provides personal banking through a separate
segment, offering personal loans, deposits, wealth management, and credit
cards.

3. JPMorgan Chase & Co. (JPM)

  Revenue (TTM): $123.42B
 Net Income (TTM): $37.07B
 Market Cap: $381.6B
 1-Year Trailing Total Return: -15.0%
 Exchange: New York Stock Exchange (NYSE)

JPMorgan Chase & Co. is a multinational bank and financial services holding
company involved in corporate lending, asset management, wealth
management, and investment and consumer banking, among other offerings.

4. Bank of America Corp. (BAC)

 Revenue (TTM): $92.48B

 Net Income (TTM): $27.41B
 Market Cap: $254.9
 1-Year Trailing Total Return: -26.0%
 Exchange: NYSE

Bank of America is a U.S. bank that offers services for individual clients and
businesses of all sizes. Besides deposit and checking accounts through its
Consumer Banking branch, Bank of America provides a variety of commercial
and wealth management services through its Global branches as well.

5. Wells Fargo & Co. (WFC)

 Revenue (TTM): $74.98B

 Net Income (TTM): $16.07B
 Market Cap: $157.6B
 1-Year Trailing Total Return: -13.5%
 Exchange: NYSE

Wells Fargo is recognized as a prominent financial institution that offers a

diverse range of banking services, including personal and commercial
banking, wealth management, and investment banking, catering to the needs
of individuals, businesses, and institutional clients.

6. Citigroup Inc. (C)

 Revenue (TTM): $74.31B

 Net Income (TTM): $15.51B
 Market Cap: $86.4B
 1-Year Trailing Total Return: -23.0%
  Exchange: NYSE

Citigroup is a multinational investment bank and financial services company

based in New York, offering securities services, institutional financial
services, global retail banking, and more.

7. BNP Paribas (BNPQY)

 Revenue (TTM): $70.33B

 Net Income (TTM): $11.17B
 Market Cap: $67.7B
 1-Year Trailing Total Return: -7.1%
 Exchange: OTC

BNP Paribas is a major international bank headquartered in Paris, France. It

is one of the largest banks in the world, with operations in more than 60
countries and a strong presence in Europe, the Middle East, and North
Africa.1 The bank offers a wide range of financial services, including retail
banking, corporate and investment banking, asset management, and private
banking. It serves a diverse range of customers, including individuals,
businesses, and institutions, and is known for its expertise in areas such as
financing, investment, and risk management.

8. HSBC Holdings (HSBC)

 Revenue (TTM): $56.28B

 Net Income (TTM): $13.22B
 Market Cap: $119.7B
 1-Year Trailing Total Return: 8.6%
 Exchange: NYSE

HSBC (short for The Hongkong and Shanghai Banking Corporation) is a

multinational bank and financial services company headquartered in London,
United Kingdom. It is one of the largest banks in the world by total assets and
has operations in more than 60 countries.2 HSBC offers a wide range of
financial products and services, including retail and commercial banking,
wealth management, and investment banking. The bank serves customers in
various sectors, including individuals, small and medium-sized enterprises,
and large corporations. In addition to its core banking business, HSBC also
has a significant presence in insurance, asset management, and other
financial services.
 9. Banco Santander (SAN)

 Revenue (TTM): $54.64B

 Net Income (TTM): $10.40B
 Market Cap: $47.5B
 1-Year Trailing Total Return: -1.2%
 Exchange: NYSE

Santander is a multinational bank and financial services company

headquartered in Madrid, Spain, and has operations in more than 10
countries.3 Santander offers a wide range of financial products and services,
including retail and commercial banking, investment banking, asset
management, and insurance. The bank serves a diverse range of customers,
including individuals, small and medium-sized enterprises, and large
corporations. In addition to its core banking business, Santander also has a
significant presence in the asset management and insurance sectors.

10. China Merchants Bank (CIHKY)

 Revenue (TTM): $51.79B

 Net Income (TTM): $20.30B
 Market Cap: $133.4B
 1-Year Trailing Total Return: -32.2%
 Exchange: OTC

China Merchants Bank (CMB) is a state-owned bank in China that provides a

range of financial products and services, including retail and corporate
banking, investment banking, and asset management. It is headquartered in
Shenzhen, China and has branches and outlets throughout the country, as
well as operations in Hong Kong, Europe, and the United States. CMB is one
of the largest banks in China and is known for its strong focus on retail
banking, with a large network of branches and ATMs and a range of products
and services tailored to the needs of individual customers. The bank also has
a significant presence in corporate banking and serves a diverse range of
customers, including small and medium-sized enterprises and large
corporations.