Banking - Southern Europe

Southern Europe

In 2024, the projected Net Interest Income in the Banking market of Southern Europe is expected to reach US$131.90bn.
The market is currently dominated by Traditional Banks, which are projected to have a market volume of US$90.93bn in 2024.
Looking ahead, the Net Interest Income is expected to display an annual growth rate (CAGR 2024-2029) of -0.83%, resulting in a market volume of US$126.50bn by 2029.
When compared globally, China is forecasted to generate the highest Net Interest Income, with an estimated amount of US$4,332.0bn in 2024.
In Southern Europe, the banking sector in Italy is experiencing a rise in digital banking services, as customers increasingly opt for online and mobile banking platforms.

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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Currency

Analyst Opinion

The Banking market in Southern Europe has been experiencing notable trends and developments in recent years.

Customer preferences: Customers in Southern Europe are increasingly seeking digital banking solutions that offer convenience and accessibility. The shift towards online and mobile banking services has been driven by the younger generation's preference for technology-driven solutions. Additionally, customers are placing a greater emphasis on personalized services and tailored financial products to meet their individual needs.

Trends in the market: In Italy, there has been a growing trend towards consolidation in the banking sector as institutions look to improve efficiency and streamline operations. This trend is driven by the need to adapt to changing regulatory requirements and enhance competitiveness in the market. Furthermore, banks in Spain have been focusing on sustainable finance initiatives to align with environmental and social goals, reflecting a broader global trend towards responsible banking practices.

Local special circumstances: Greece has been navigating through a challenging economic environment, leading to increased focus on non-performing loans and capital adequacy in the banking sector. As the country continues its path to recovery, Greek banks are looking to strengthen their balance sheets and improve profitability. In Portugal, the banking market has been impacted by low interest rates, prompting banks to explore alternative revenue streams and cost-cutting measures to maintain profitability.

Underlying macroeconomic factors: The Banking market in Southern Europe is influenced by various macroeconomic factors, including economic growth, regulatory changes, and geopolitical developments. The region's banking sector is closely tied to the overall economic performance of each country, with factors such as GDP growth and unemployment rates shaping the demand for banking services. Regulatory changes, such as the implementation of Basel III requirements, have also had a significant impact on banks' capital positions and risk management practices in the region. Geopolitical events, such as Brexit and trade tensions, have added a layer of uncertainty for banks operating in Southern Europe, affecting investment decisions and market dynamics.

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.