Traditional Banks - Central & Western Europe

Central & Western Europe

In Central & Western Europe, the Traditional Banks market market is expected to witness a significant growth in Net Interest Income.
By 2024, it is projected to reach a staggering amount of US$558.50bn.
Among the different segments, Traditional Commercial Banking is set to dominate the market with a projected market volume of US$390.10bn in the same year.
Looking ahead, the Net Interest Income is anticipated to demonstrate a steady annual growth rate of 2.45% between 2024 and 2029 (CAGR 2024-2029).
This growth trajectory is expected to result in a market volume of US$630.40bn by 2029.
It is worth noting that in a global perspective, China is expected to generate the highest Net Interest Income.
In 2024, China is projected to generate a remarkable amount of US$3,869.0bn in Net Interest Income.
In Germany, traditional banks are facing increased competition from digital banking platforms, leading to a shift in customer preferences.

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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Market

Region

Region comparison

Currency

Analyst Opinion

The Traditional Banks market in Central & Western Europe is experiencing a shift in customer preferences, leading to several notable trends in the industry.

Customer preferences: Customers in Central & Western Europe are increasingly seeking personalized banking services and digital solutions that offer convenience and efficiency. This shift is being driven by the growing adoption of technology in everyday life, prompting traditional banks to enhance their online and mobile banking platforms to meet customer expectations. Additionally, there is a rising demand for sustainable banking practices and ethical investments among customers in the region.

Trends in the market: In Germany, traditional banks are facing competition from digital banks that offer innovative services and attract tech-savvy customers. As a result, traditional banks in the country are investing in digital transformation to remain competitive and retain market share. In France, there is a trend towards consolidation in the traditional banking sector, with larger banks acquiring smaller regional players to expand their customer base and market presence. This consolidation is driven by the need to achieve economies of scale and streamline operations in a highly competitive market.

Local special circumstances: In Italy, the traditional banking sector is grappling with high levels of non-performing loans and a fragmented market structure. Italian banks are under pressure to improve asset quality and profitability, leading to efforts to reduce non-performing loans and enhance risk management practices. In Spain, traditional banks are focusing on diversifying their revenue streams and expanding into new markets to offset the impact of low interest rates and regulatory challenges. Spanish banks are also investing in digital technologies to improve operational efficiency and enhance the customer experience.

Underlying macroeconomic factors: The Traditional Banks market in Central & Western Europe is influenced by macroeconomic factors such as low interest rates, regulatory changes, and economic uncertainty. The prolonged period of low interest rates has compressed net interest margins for traditional banks, affecting their profitability and prompting a search for alternative revenue sources. Regulatory changes aimed at enhancing consumer protection and promoting financial stability have also shaped the operating environment for traditional banks in the region. Economic uncertainty, including Brexit and the impact of the COVID-19 pandemic, has further challenged traditional banks to adapt to changing market conditions and customer needs.

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.