Traditional Banks - Iraq

Iraq

In 2024, the projected Net Interest Income in the Traditional Banks market market in Iraq is expected to reach US$11.10bn.
Traditional Retail Banking dominates this market segment, with a projected market volume of US$5.73bn in 2024.
Looking ahead, the Net Interest Income is forecasted to exhibit an annual growth rate (CAGR 2024-2029) of -0.07%, resulting in a market volume of US$11.06bn by 2029.
When compared globally, China is expected to generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Despite political and economic challenges, traditional banks in Iraq are adapting to digitalization to cater to the needs of 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 Iraq has been experiencing notable developments in recent years.

Customer preferences: Customers in Iraq tend to prefer traditional banking services due to a combination of factors such as trust in established institutions, cultural norms, and limited access to technology. The majority of the population still values face-to-face interactions and personalized services offered by traditional banks.

Trends in the market: One of the prominent trends in the Traditional Banks market in Iraq is the expansion of branch networks into underserved regions. Traditional banks are focusing on reaching out to rural areas to tap into unexplored markets and cater to the banking needs of a broader customer base. Moreover, there is a growing trend towards offering Islamic banking services to meet the religious preferences of the population.

Local special circumstances: Iraq's banking sector has been heavily influenced by the geopolitical landscape of the region. The country's history of conflict and instability has impacted the banking industry, leading to challenges in terms of infrastructure development and regulatory framework. Traditional banks have had to navigate through these unique circumstances to ensure stability and growth in the market.

Underlying macroeconomic factors: The macroeconomic factors shaping the Traditional Banks market in Iraq include the country's oil-dependent economy, government policies, and efforts towards financial inclusion. The fluctuations in oil prices directly impact the banking sector, making it crucial for traditional banks to diversify their revenue streams. Government initiatives to promote financial inclusion are also driving the growth of traditional banks by expanding access to banking services across 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.