Traditional Banks - Iran

Iran

In 2024, it is projected that the net interest income in the Traditional Banks market market in Iran will reach US$118.60bn.
The market is currently dominated by Traditional Retail Banking, which is expected to have a market volume of US$75.88bn in 2024.
Looking ahead, the net interest income is expected to display an annual growth rate (CAGR 2024-2029) of 1.43%, resulting in a market volume of US$127.30bn by 2029.
When compared globally, the highest amount of net interest income will be generated China, reaching US$3,869.0bn in 2024.
Traditional banks in Iran are facing challenges in adapting to digitalization, but still maintain a strong presence in the financial market.

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

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Analyst Opinion

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

Customer preferences: Customers in Iran are showing a strong preference for traditional banking services offered by brick-and-mortar banks. They value the security, reliability, and personal interaction that traditional banks provide. Additionally, many customers in Iran have a cultural affinity towards traditional banking practices, further driving their preference for these institutions.

Trends in the market: One notable trend in the Traditional Banks market in Iran is the increasing digitization of services. While customers still value in-person interactions, banks are incorporating digital solutions to improve efficiency and reach a wider customer base. This trend is in line with global advancements in the banking sector, catering to the growing tech-savvy population in Iran.

Local special circumstances: Iran has a unique banking landscape due to its regulatory environment and geopolitical factors. Sanctions imposed on the country have limited its access to international banking systems, leading traditional banks to focus more on domestic operations. This has created opportunities for local banks to strengthen their presence and offerings within the country.

Underlying macroeconomic factors: The development of the Traditional Banks market in Iran is also influenced by macroeconomic factors such as inflation, interest rates, and government policies. Economic stability and regulatory changes play a significant role in shaping the growth trajectory of traditional banks in the country. As Iran continues to navigate through economic challenges, traditional banks are adapting their strategies to remain competitive and resilient in the market.

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.