Banking - Bhutan

Bhutan

In Bhutan, the Banking market is expected to witness significant growth in the coming years.
According to projections, the Net Interest Income is anticipated to reach US$354.30m by 2024.
The market is currently dominated by Traditional Banks, which are expected to account for a projected market volume of US$354.00m in 2024.
Looking ahead, the Net Interest Income is forecasted to exhibit a compound annual growth rate (CAGR 2024-2029) of 5.68%.
This growth rate is expected to result in a market volume of US$467.00m by 2029.
When compared globally, it is worth noting that China is projected to generate the highest Net Interest Income, with an estimated amount of US$4,332.0bn in 2024.
Bhutan's banking sector is experiencing a shift towards digital banking solutions to cater to the growing demand for convenient and accessible financial 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

The Banking market in Bhutan is experiencing steady growth and development, driven by various factors unique to the country.

Customer preferences: Customers in Bhutan are increasingly seeking digital banking solutions, leading to a rise in online and mobile banking services. This shift is largely influenced by the convenience and accessibility offered by digital platforms, aligning with global trends towards digitalization in the banking sector.

Trends in the market: One prominent trend in the Bhutanese banking market is the focus on expanding financial inclusion. Banks are actively working to reach unbanked populations in remote areas through innovative strategies such as mobile banking vans and agent banking services. This trend is in line with global efforts to promote financial access for all segments of society.

Local special circumstances: Bhutan's unique geographical landscape, characterized by rugged terrain and scattered population centers, poses challenges for traditional brick-and-mortar banking infrastructure. As a result, banks in Bhutan are increasingly leveraging technology to overcome these obstacles and reach a wider customer base. The government's support for digital initiatives further accelerates this shift towards tech-driven banking services.

Underlying macroeconomic factors: The steady economic growth in Bhutan, supported by sectors such as hydropower and tourism, provides a favorable environment for the banking industry. As disposable incomes rise and business activities expand, the demand for banking services increases correspondingly. Additionally, Bhutan's focus on sustainable development aligns with the banking sector's emphasis on responsible lending practices and green financing initiatives.

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.