Banking - Puerto Rico

Puerto Rico

In the year 2024, it is projected that the Net Interest Income in the Banking market of Puerto Rico will reach a substantial amount of US$17.22bn.
This indicates the revenue generated by the interest earned on loans and investments, minus the interest paid on deposits and borrowings.
Within this market segment, Traditional Banks are expected to dominate, with a projected market volume of US$15.34bn in 2024.
These banks, which have a long-established presence and offer a wide range of financial services, hold a significant share of the market in Puerto Rico.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate, also known as the Compound Annual Growth Rate (CAGR), of 2.83% from 2024 to 2029.
This growth rate suggests a steady increase in the interest income generated by the Banking market sector in Puerto Rico.
By 2029, the market volume is projected to reach US$19.80bn, reflecting the positive trajectory of the industry.
In a global comparison, it is worth noting that China is expected to generate the highest Net Interest Income in 2024, amounting to US$4,332.0bn.
This highlights the significant role that China plays in the global Banking market sector, both in terms of its market size and its influence on the overall industry trends.
In Puerto Rico, the banking industry is experiencing a shift towards digital banking solutions to meet the needs of the tech-savvy population.

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

Amidst the tropical paradise of Puerto Rico, the Banking market is experiencing notable trends and developments.

Customer preferences: Customers in Puerto Rico are increasingly leaning towards digital banking solutions, driven by the convenience and efficiency they offer. The preference for online and mobile banking services has been on the rise, reflecting a global shift towards digitalization in the banking sector.

Trends in the market: One prominent trend in the Puerto Rican Banking market is the growing focus on financial inclusion. Banks are expanding their outreach to underserved communities and offering tailored products to cater to a wider customer base. This trend aligns with global efforts to promote financial literacy and inclusion across different demographics.

Local special circumstances: The unique status of Puerto Rico as a territory of the United States presents both opportunities and challenges for the Banking market. The island's economy is closely tied to the US, influencing banking regulations and market dynamics. Additionally, the aftermath of natural disasters such as hurricanes has had a significant impact on the local economy and banking sector, shaping the market landscape in unique ways.

Underlying macroeconomic factors: Macroeconomic factors play a crucial role in shaping the Banking market in Puerto Rico. Economic stability, government policies, and external influences all contribute to the overall health of the banking sector. Given Puerto Rico's status as a territory, factors such as trade agreements and federal policies have a direct impact on the local banking industry. Additionally, the island's recovery from natural disasters and efforts to boost economic growth are key macroeconomic factors influencing the banking market.

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.