Banking - Croatia

Croatia

In Croatia, the Net Interest Income in the Banking market is projected to reach US$2.23bn in 2024.
Traditional Banks dominate the market with a projected market volume of US$1.85bn in the same year.
Looking ahead, the Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of -0.82%, resulting in a market volume of US$2.14bn by 2029.
When comparing globally, it is worth noting that China is expected to generate the highest Net Interest Income, reaching US$4,332.0bn in 2024.
Croatia's banking market is seeing a rise in digital banking services, with more customers opting for online and mobile banking solutions.

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 Croatia has been experiencing notable developments in recent years.

Customer preferences: Customers in Croatia are increasingly demanding more digital banking services, prompting banks to invest in online and mobile banking platforms to cater to this growing trend. The convenience of accessing banking services remotely has become a key priority for customers, leading to a shift away from traditional brick-and-mortar branches.

Trends in the market: One prominent trend in the Croatian banking market is the consolidation of smaller banks, as larger financial institutions look to strengthen their market presence and expand their customer base. This trend is driven by the need for economies of scale and enhanced competitiveness in the market. Additionally, there is a growing focus on sustainable finance and socially responsible banking practices, with banks in Croatia aligning their strategies with environmental, social, and governance (ESG) principles.

Local special circumstances: Croatia's banking market is unique due to its relatively small size and the dominance of a few key players. This market structure presents both challenges and opportunities for banks operating in the country. The regulatory environment in Croatia also plays a significant role in shaping the banking sector, with stringent regulations aimed at ensuring financial stability and consumer protection.

Underlying macroeconomic factors: The economic landscape in Croatia, including factors such as GDP growth, inflation rates, and unemployment levels, influences the performance of the banking market. Economic stability and growth are essential for the banking sector to thrive, as they drive lending activity, deposit mobilization, and overall financial market development. In addition, geopolitical developments and external factors can impact Croatia's banking market, highlighting the interconnectedness of the country's economy with global trends.

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.