Banking - Northern Africa

Northern Africa

In 2024, the projected Net Interest Income in the Banking market of Northern Africa is estimated to reach US$66.83bn.
Traditional Banks are set to dominate this market segment with a projected market volume of US$65.21bn in the same year.
Looking ahead, it is expected that the Net Interest Income will experience an annual growth rate (CAGR 2024-2029) of 5.90%, resulting in a market volume of US$89.02bn by 2029.
When considering global comparison, it is worth noting that China is expected to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
The banking sector in Northern Africa is experiencing a surge in digital banking services, with mobile banking becoming increasingly popular among consumers.

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 Northern Africa is experiencing a significant transformation driven by various factors shaping customer preferences, market trends, and local special circumstances.

Customer preferences: Customers in Northern Africa are increasingly demanding more convenient and efficient banking services. With the rise of digitalization and technological advancements, there is a growing preference for online and mobile banking solutions. This shift is primarily influenced by the younger population seeking easy access to financial services and the convenience of conducting transactions anytime, anywhere.

Trends in the market: In countries like Egypt and Morocco, there is a noticeable trend towards the adoption of fintech solutions and digital payment platforms. Fintech companies are disrupting the traditional banking sector by offering innovative products and services that cater to the evolving needs of customers. This trend is driving competition within the market and pushing traditional banks to enhance their digital offerings to stay relevant and competitive.

Local special circumstances: Political and economic stability play a crucial role in shaping the banking market in Northern Africa. Countries in the region are working towards improving regulatory frameworks and enhancing financial inclusion to support economic growth. Additionally, factors such as population growth, urbanization, and increasing disposable income levels are influencing the demand for banking services and driving market expansion.

Underlying macroeconomic factors: The macroeconomic landscape in Northern Africa, including factors such as GDP growth, inflation rates, and foreign direct investment, has a direct impact on the banking sector. Economic stability and growth contribute to increased investment opportunities, higher consumer spending, and overall market development. As the region continues to focus on economic reforms and diversification, the banking market is expected to witness further growth and innovation to meet the evolving needs of customers.

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.