Banking - Brunei Darussalam

Brunei Darussalam

In 2024, it is projected that the Banking market in Brunei Darussalam will reach a Net Interest Income of BND US$333.40m.
Among the market players, Traditional Banks are expected to dominate with a projected market volume of BND US$314.70m in the same year.
Looking ahead, the Net Interest Income is anticipated to display a compound annual growth rate (CAGR 2024-2029) of 7.18%, resulting in a market volume of BND US$471.60m by 2029.
When compared globally, it is noteworthy that China is expected to generate the highest Net Interest Income, reaching a staggering amount of CNY US$4,332.0bn in 2024.
Brunei Darussalam's banking sector is experiencing a rise in Islamic banking services, driven by the country's strong adherence to Shariah principles.

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 Brunei Darussalam has been experiencing significant developments in recent years.

Customer preferences: Customers in Brunei Darussalam are increasingly seeking digital banking solutions, leading to a rise in the adoption of online and mobile banking services. This shift is driven by the convenience and accessibility offered by digital platforms, allowing customers to conduct their banking activities anytime and anywhere. Moreover, customers are also placing a greater emphasis on personalized services and financial advice to help them achieve their financial goals.

Trends in the market: One notable trend in the Brunei Darussalam banking market is the growing focus on Islamic banking products and services. As a predominantly Muslim country, there is a strong demand for Sharia-compliant banking solutions, leading to the expansion of Islamic banking offerings by financial institutions in the country. Additionally, there is a trend towards sustainable and socially responsible banking practices, with banks incorporating environmental, social, and governance (ESG) criteria into their operations.

Local special circumstances: Brunei Darussalam's small population and concentrated market present unique challenges and opportunities for banks operating in the country. The limited customer base necessitates a focus on customer retention and loyalty, as well as the development of innovative products and services to differentiate from competitors. Furthermore, the country's high GDP per capita provides banks with the opportunity to cater to affluent individuals with specialized wealth management services.

Underlying macroeconomic factors: The stability of Brunei Darussalam's economy, supported by its oil and gas reserves, has contributed to a favorable banking environment in the country. The government's efforts to diversify the economy and promote private sector growth have also created opportunities for banks to expand their lending activities and support economic development. Additionally, Brunei Darussalam's strategic location in Southeast Asia positions it as a potential financial hub, attracting foreign investment and fostering collaboration with regional financial institutions.

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.