Banking - Pakistan

Pakistan

In 2024, the projected Net Interest Income in the Banking market of Pakistan is expected to reach US$52.67bn.
Traditional Banks are expected to dominate the market with a projected market volume of US$52.39bn in the same year.
Looking ahead, the Net Interest Income is forecasted to grow at an annual growth rate of 5.13% (CAGR 2024-2029), resulting in a market volume of US$67.64bn by 2029.
When compared globally, China is expected to generate the highest Net Interest Income, reaching US$4,332.0bn in 2024.
Pakistan's banking sector is experiencing a surge in digital banking services, with a growing number of customers opting for online transactions and mobile banking.

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

Pakistan's Banking market is experiencing significant growth and development due to various factors influencing the industry.

Customer preferences: Customers in Pakistan are increasingly looking for convenient and efficient banking services, leading to a rise in demand for digital banking solutions. The convenience of online banking, mobile apps, and digital payment methods is driving customers to opt for banks that offer these services seamlessly.

Trends in the market: One prominent trend in the Banking market in Pakistan is the increasing competition among banks to expand their branch networks, especially in rural areas. This expansion is aimed at tapping into previously underserved markets and increasing financial inclusion across the country. Additionally, banks in Pakistan are focusing on developing innovative products and services to cater to the diverse needs of customers, such as Islamic banking products and tailored financing solutions.

Local special circumstances: In Pakistan, the banking sector is heavily influenced by regulatory frameworks and government policies. The State Bank of Pakistan plays a crucial role in regulating the industry and ensuring stability. Moreover, the prevalence of Islamic banking in the country sets it apart from other markets, with a significant portion of the population opting for Sharia-compliant banking services.

Underlying macroeconomic factors: The overall economic growth and stability in Pakistan play a vital role in shaping the Banking market. As the economy continues to grow, the demand for banking services, including loans, savings, and investment products, is expected to increase. Additionally, factors such as interest rates, inflation, and foreign investment inflows impact the profitability and operations of banks 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.