Traditional Banks - Albania

Albania

In Albania, the net interest income in the market segment of Traditional Banks market is expected to reach US$0.88bn in 2024.
Among the various sectors, Traditional Retail Banking is projected to dominate the market with a market volume of US$0.66bn in the same year.
Looking ahead, the net interest income is anticipated to exhibit an annual growth rate (CAGR 2024-2029) of -6.76%, resulting in a market volume of US$0.62bn by 2029.
When compared globally, it is noteworthy that China is expected to generate the highest net interest income, amounting to US$3,869.0bn in 2024.
Traditional banks in Albania are facing increased competition from digital banks and fintech companies, forcing them to adopt innovative technologies and improve their online banking services.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks 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. 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.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, 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 and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

Over the past few years, the Traditional Banks market in Albania has experienced significant growth and development.

Customer preferences: Albanian customers have shown a strong preference for traditional banking services, such as savings accounts, loans, and mortgages, due to a cultural trust in established financial institutions. Additionally, the majority of the population still prefers face-to-face interactions when it comes to managing their finances, which has contributed to the continued relevance of brick-and-mortar bank branches in the country.

Trends in the market: One notable trend in the Albanian Traditional Banks market is the increasing adoption of digital banking services. While traditional banking remains popular, more customers are now embracing online and mobile banking for its convenience and accessibility. This shift towards digitalization has prompted traditional banks in Albania to invest in technology and enhance their digital offerings to meet the evolving needs of customers.

Local special circumstances: Albania's banking sector has been influenced by the country's history of economic and political instability. As a result, traditional banks have played a crucial role in providing stability and security to customers. The conservative approach of traditional banks in Albania, characterized by a focus on risk management and regulatory compliance, has helped maintain trust and confidence in the financial system.

Underlying macroeconomic factors: The development of the Traditional Banks market in Albania is also influenced by macroeconomic factors such as GDP growth, inflation rates, and government policies. As the economy continues to grow and stabilize, there is an increasing demand for banking services to support personal and business financial needs. Additionally, regulatory reforms and initiatives aimed at strengthening the banking sector have created a more conducive environment for the growth of traditional 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.