Banking - MENA

MENA

Net Interest Income in the Banking market is projected to reach US$408.30bn in 2024.
Traditional Banks dominates the market with a projected market volume of US$374.20bn in 2024.
Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 3.24%, resulting in a market volume of US$478.90bn by 2029.
In global comparison, most Net Interest Income will be generated in China (US$4,332.0bn in 2024).

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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Market

Region

Region comparison

Currency

Analyst Opinion

The banking sector in the Middle East and North Africa (MENA) region is experiencing significant growth and development, driven by various factors such as increasing digitalization, changing customer preferences, and evolving regulatory environment.

Customer preferences: Customers in the MENA region are increasingly seeking more convenient and efficient banking services, leading to a growing demand for digital banking solutions. Mobile banking apps, online account management, and contactless payment options are becoming more popular among customers in the region. Additionally, personalized services and tailored financial products are gaining traction as customers look for more customized banking experiences.

Trends in the market: In Saudi Arabia, the banking sector is witnessing a trend towards consolidation, with larger banks acquiring smaller financial institutions to strengthen their market position. This trend is driven by the need for economies of scale, increased competition, and regulatory requirements. Moreover, Islamic banking is also gaining prominence in the country, with a growing number of customers opting for Sharia-compliant financial products and services.

Local special circumstances: In the United Arab Emirates (UAE), the banking sector is characterized by a high level of competition among local and international banks. As a regional financial hub, the UAE attracts a large number of expatriates and foreign investors, leading to diverse customer preferences and demands. Banks in the UAE are focusing on innovation and technology to differentiate themselves in the market and cater to the needs of a tech-savvy customer base.

Underlying macroeconomic factors: The economic diversification efforts in the MENA region, particularly in countries like Qatar and Kuwait, are driving the growth of the banking sector. As these countries reduce their reliance on oil revenues and focus on developing other industries, the demand for banking and financial services is expected to increase. Additionally, regulatory reforms aimed at enhancing transparency, governance, and risk management are shaping the banking landscape in the region, leading to a more stable and competitive market environment.

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.