Traditional Banks - Czechia

Czechia

In 2024, the projected Net Interest Income in the Traditional Banks market market in Czechia is expected to reach US$7.97bn.
Traditional Commercial Banking dominates this market segment in the country, with a projected market volume of US$6.83bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit an annual growth rate of 2.55% (CAGR 2024-2029), resulting in a market volume of US$9.04bn by 2029.
In a global comparison, it is noteworthy that China will generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Traditional banks in Czechia are facing increased competition from digital banks, 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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Analyst Opinion

Over the past few years, the Traditional Banks market in Czechia has been witnessing significant developments and trends that are shaping the industry landscape.

Customer preferences: Customers in Czechia are increasingly valuing personalized services and digital banking solutions offered by traditional banks. The convenience of online banking, mobile apps, and digital payment options are becoming more popular among customers, driving the demand for innovative banking technologies.

Trends in the market: One notable trend in the Traditional Banks market in Czechia is the increasing competition from digital banks and fintech companies. These new entrants are disrupting the market by offering agile and customer-centric banking services, forcing traditional banks to enhance their digital capabilities and customer experience to stay competitive. Another trend is the growing focus on sustainable and socially responsible banking practices. Customers in Czechia are showing a preference for banks that demonstrate a commitment to environmental and social causes, leading traditional banks to integrate sustainability into their business strategies and offerings.

Local special circumstances: Czechia has a well-established banking sector with a high level of financial literacy among its population. This has created a favorable environment for traditional banks to introduce innovative products and services, catering to the diverse financial needs of customers. Moreover, the regulatory environment in Czechia is evolving to promote competition and innovation in the banking sector. Regulatory changes, such as open banking initiatives and data protection regulations, are influencing how traditional banks operate and interact with customers in the market.

Underlying macroeconomic factors: The stable economic growth and low unemployment rate in Czechia are contributing to the overall positive outlook for the Traditional Banks market. As the economy continues to expand, traditional banks are expected to benefit from increased lending opportunities and higher demand for financial services from businesses and consumers. Additionally, the low interest rate environment in Czechia is influencing the profitability of traditional banks, prompting them to explore new revenue streams and cost-saving measures to maintain their financial performance in a challenging market landscape.

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.