Since the 19th century, foreign banks have taken an active part in the German market, offering banking services, such as lending, documentary, foreign exchange services as well as providing guarantee business and settling payment transactions between their home countries and Germany. Meanwhile, due to the interconnected international economy further services have become necessary, for instance in relation to cross-border company mergers and acquisitions, large volume financing or issuance of securities. Foreign banks are also actively involved in the provision of investment banking services, retail and universal banking as well as investment services.
The business models, services and competences of the 183 foreign banks are wide-ranging. Retail and institutional clients in Germany benefit from both the manifold range of services offered and the combination of international experience and the network of internationally established groups of companies. The foreign banks are in particular committed in the following areas:
As a general rule, products of foreign financial institutions will only be distributed to the German market after having their proof of value in the home-state markets. Accordingly, experience and innovation are brought to the German financial center.
For many companies that operate internationally, foreign banks are an interface to the respective export markets due to their cross-border business activities. In particular, institutions benefitting from a global presence are therefore in a position to offer their clients services from a single source – regardless of the respective country.
With view to trade financing, foreign institutions support cross-border transactions between the respective home country and Germany. In many cases, they are already involved at the stage of initiating the transactions due to their home-state related expertise.
Foreign banks have also established themselves in corporate financing (equity and debt). Furthermore, they are heavily involved in the syndication of large loan volumes. This helps to maintain the necessary liquidity for the German economy.
A traditionally important area of activity for many foreign banks is the provision of asset management services, often also referred to as wealth management. Individually tailored investments are designed for individual clients or groups of clients.
Foreign banks have a strong presence in trading on the German stock exchanges – especially the Frankfurt Stock Exchange and the EUREX derivatives exchange – and thus contribute to the liquidity of the markets.
Internationally positioned and globally networked custodians – global custodians – enable fund companies and other investors to globally invest in financial instruments and to administer these investments in the respective countries.