Traditional Banks - Lebanon

Lebanon

In 2024, the projected Net Interest Income in the Traditional Banks market market of Lebanon is expected to reach US$9.66bn.
Traditional Retail Banking is the dominant segment in this market, with a projected market volume of US$6.29bn in 2024.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate of 5.96% from 2024 to 2029, resulting in a market volume of US$12.90bn by 2029.
When compared globally, China is expected to generate the highest Net Interest Income of US$3,869.0bn in 2024.
Lebanon's traditional banking sector is facing stiff competition from digital banks, pushing them to adopt innovative strategies to retain customers.

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 Lebanon has been experiencing a shift in customer preferences and market trends in recent years.

Customer preferences: Customers in Lebanon are increasingly seeking personalized and convenient banking services. They value face-to-face interactions with bank representatives and prefer traditional banking methods over digital alternatives. Additionally, customers prioritize trust and stability when choosing a bank, leading them to opt for well-established traditional banks with a long history in the market.

Trends in the market: One noticeable trend in the Traditional Banks market in Lebanon is the focus on expanding branch networks to reach a wider customer base. Traditional banks are also placing emphasis on offering a diverse range of financial products and services to cater to the varying needs of customers. Moreover, there is a growing trend towards promoting financial inclusion by providing access to banking services for underserved populations in both urban and rural areas.

Local special circumstances: The political and economic instability in Lebanon has had a significant impact on the Traditional Banks market. The uncertainty has led traditional banks to adopt conservative strategies to mitigate risks and ensure financial stability. Additionally, the presence of a large expatriate community in Lebanon has influenced the market dynamics, with traditional banks developing specialized services to cater to the unique needs of this customer segment.

Underlying macroeconomic factors: The economic challenges facing Lebanon, such as high inflation rates and currency depreciation, have contributed to the evolution of the Traditional Banks market. Traditional banks have had to adapt their operations to navigate the volatile economic environment and maintain profitability. Furthermore, regulatory changes and compliance requirements have also influenced the market landscape, prompting traditional banks to enhance their risk management practices and governance structures to meet regulatory standards.

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.