Traditional Banks - EAEU

EAEU

In 2024, it is projected that the net interest income in the Traditional Banks market market of the EAEU will reach US$63.52bn.
Traditional Retail Banking is expected to dominate this market segment, with a projected market volume of US$39.56bn in 2024.
Looking ahead, the net interest income is anticipated to demonstrate an annual growth rate (CAGR 2024-2029) of 1.69%, leading to a market volume of US$69.06bn by 2029.
When compared globally, it is noteworthy that the majority of net interest income will be generated China, reaching US$3,869.0bn in 2024.
In the traditional banking market in the EAEU, Kazakhstan is experiencing a shift towards digital banking services to cater to the tech-savvy population.

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

The Traditional Banks market in EAEU is experiencing significant growth and development.

Customer preferences: Customers in the EAEU region are increasingly valuing the stability and reliability offered by traditional banks. They prefer the personalized service and face-to-face interactions provided by brick-and-mortar branches, which instill a sense of trust and security in their financial transactions.

Trends in the market: One of the key trends in the Traditional Banks market in EAEU is the digital transformation of these institutions. While traditional banks are known for their physical presence, they are also investing in online banking platforms and mobile applications to cater to the growing demand for digital banking services. This trend is driven by the changing preferences of younger generations who seek convenience and accessibility in their banking experience.

Local special circumstances: In the EAEU region, the Traditional Banks market is influenced by the unique regulatory environment that governs financial institutions. Each country within the EAEU has its own set of regulations and compliance requirements, which traditional banks must navigate to operate successfully across borders. This presents both challenges and opportunities for banks looking to expand their presence in the region.

Underlying macroeconomic factors: The development of the Traditional Banks market in the EAEU is also shaped by macroeconomic factors such as economic growth, inflation rates, and foreign exchange fluctuations. As the region continues to integrate and strengthen its economic ties, traditional banks play a crucial role in facilitating cross-border trade and investment. Additionally, the stability of the banking sector is closely tied to the overall economic stability of the EAEU countries, making it essential for traditional banks to adapt to changing market conditions.

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.