Banking - Lebanon

Lebanon

In 2024, the projected Net Interest Income in the Banking market in Lebanon is expected to reach US$9.71bn.
Traditional Banks are expected to dominate the market with a projected market volume of US$9.66bn in the same year.
Looking ahead, the Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 5.94%, resulting in a market volume of US$12.96bn by 2029.
In comparison to other countries globally, China is anticipated to generate the highest Net Interest Income, reaching US$4,332.0bn in 2024.
Despite the ongoing economic and political challenges, Lebanon's banking sector continues to demonstrate resilience and adaptability.

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 Lebanon has been experiencing significant shifts and developments in recent years.

Customer preferences: Customers in Lebanon are increasingly seeking digital banking solutions that offer convenience and accessibility. The younger population, in particular, is driving the demand for online and mobile banking services. Additionally, there is a growing interest in sustainable and ethical banking practices among customers in the country.

Trends in the market: One notable trend in the Lebanese Banking market is the focus on innovation and technology. Banks are investing in digital transformation to enhance customer experience and streamline operations. Another trend is the rising competition among banks, leading to the introduction of new products and services to attract and retain customers. Moreover, there is a growing emphasis on financial inclusion, with banks expanding their reach to underserved communities.

Local special circumstances: The Banking market in Lebanon is influenced by the country's unique geopolitical and economic challenges. Political instability and economic uncertainty have impacted the sector, leading to fluctuations in customer confidence and investment. The presence of a large diaspora population also plays a role in shaping the banking landscape, with remittances being a significant source of income for many Lebanese banks.

Underlying macroeconomic factors: The performance of the Banking market in Lebanon is closely tied to the country's macroeconomic environment. Factors such as inflation, exchange rates, and government policies have a direct impact on the sector. Economic reforms and stability are crucial for the growth and development of the banking industry in Lebanon. Additionally, external factors, such as regional conflicts and global economic trends, also influence the market dynamics in the country.

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.