Banking - Algeria

Algeria

In Algeria, the Net Interest Income in the Banking market is projected to reach US$6.94bn in 2024.
Traditional Banks dominate the market with a projected market volume of US$6.83bn in 2024.
The Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 5.62%, resulting in a market volume of US$9.12bn by 2029.
In global comparison, China is expected to generate the highest Net Interest Income, reaching US$4,332.0bn in 2024.
Algeria's banking market is witnessing a shift towards digital banking, with a growing number of Algerians opting for online banking services.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.

Structure:

The market consists of two segments:
- The Traditional Banking market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the Retail & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

Algeria's Banking market is experiencing notable growth and transformation in recent years.

Customer preferences: Customers in Algeria are increasingly seeking digital banking solutions that offer convenience and efficiency. The demand for online banking services, mobile banking apps, and digital payment options is on the rise as customers look for ways to manage their finances easily and securely.

Trends in the market: One prominent trend in the Algerian Banking market is the expansion of Islamic banking services to cater to the growing Muslim population's financial needs. Islamic banking follows Sharia principles, offering interest-free banking products and ethical investment opportunities. This trend reflects a global shift towards Islamic finance and is gaining traction in Algeria.

Local special circumstances: Algeria's Banking market is influenced by the country's regulatory environment and government policies. The government plays a significant role in shaping the banking sector through regulations and initiatives aimed at promoting financial inclusion and stability. Additionally, the country's young population and increasing urbanization are driving the demand for modern banking services.

Underlying macroeconomic factors: The development of Algeria's Banking market is also influenced by macroeconomic factors such as economic growth, inflation rates, and foreign investment. A stable economic environment and government efforts to promote investment and entrepreneurship are contributing to the expansion of the banking sector. Additionally, increasing financial literacy among the population and efforts to enhance cybersecurity are shaping the future of the banking industry in Algeria.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.