Traditional Banks - Laos

Laos

In 2024, the projected Net Interest Income in Laos' Traditional Banks market market is expected to reach US$9.12bn.
Traditional Commercial Banking dominates this market segment with a projected market volume of US$4.69bn in 2024.
Looking ahead, the Net Interest Income is anticipated to display an annual growth rate (CAGR 2024-2029) of 4.96%, resulting in a market volume of US$11.62bn by 2029.
It is worth noting that in global comparison, China is expected to generate the highest Net Interest Income of US$3,869.0bn in 2024.
Laos' traditional banking sector is experiencing a shift towards digitization to meet the rising demand for convenient and accessible financial services.

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 Laos is experiencing significant growth and development in response to changing customer preferences and local special circumstances.

Customer preferences: Customers in Laos are increasingly seeking traditional banking services due to a growing awareness of the benefits of using established banks for their financial needs. The trust and reliability associated with traditional banks are appealing to customers who prioritize security and stability in their financial transactions.

Trends in the market: One of the notable trends in the Traditional Banks market in Laos is the expansion of banking services to rural areas. Traditional banks are setting up branches in remote regions to reach untapped customer segments and provide essential financial services to previously underserved communities. This trend is driven by the government's initiatives to promote financial inclusion and boost economic development across the country.

Local special circumstances: Laos' unique geographical landscape, with its scattered population and diverse ethnic groups, presents challenges and opportunities for traditional banks operating in the country. To cater to the needs of customers in different regions, banks are adopting innovative strategies such as mobile banking and agent banking to ensure accessibility and convenience for all segments of the population. Additionally, the increasing digitalization of banking services is transforming the way traditional banks interact with customers and deliver financial products.

Underlying macroeconomic factors: The steady economic growth and rising disposable incomes in Laos are contributing to the expansion of the Traditional Banks market. As more people enter the formal banking system, there is a growing demand for a wide range of banking products and services, including savings accounts, loans, and investment opportunities. The government's efforts to improve the regulatory framework and enhance the stability of the financial sector are also bolstering the growth of traditional banks in 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.