Traditional Banks - Lithuania

Lithuania

In 2024, the projected Net Interest Income in the Traditional Banks market market in Lithuania is estimated to reach US$294.60m.
The market is predominantly dominated by Traditional Commercial Banking, which is expected to have a projected market volume of US$225.20m in 2024.
The Net Interest Income is anticipated to demonstrate an annual growth rate (CAGR 2024-2029) of 0.22%, resulting in a market volume of US$297.90m by 2029.
When compared globally, China is projected to generate the highest Net Interest Income, amounting to US$3,869.0bn in 2024.
Lithuania's traditional banks are embracing digital transformation to cater to the tech-savvy population and stay competitive in the evolving banking landscape.

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 Lithuania is experiencing a shift in customer preferences, driving notable trends in the industry.

Customer preferences: Customers in Lithuania are increasingly seeking personalized and convenient banking services, leading traditional banks to enhance their digital offerings to meet these demands. The convenience of online and mobile banking services is becoming a key factor for customers when choosing a bank, pushing traditional banks to invest in technology to improve their digital platforms and customer experience.

Trends in the market: One significant trend in the Traditional Banks market in Lithuania is the rising competition from digital banks and fintech companies. These new players are gaining popularity among tech-savvy customers due to their innovative services and seamless user experience. As a result, traditional banks are facing pressure to innovate and adapt their business models to compete effectively in the evolving financial landscape. Another trend shaping the market is the increasing focus on sustainability and ethical banking practices. Customers are showing a growing interest in environmentally and socially responsible banking, prompting traditional banks in Lithuania to integrate sustainability principles into their operations. This trend is not only driven by customer preferences but also by regulatory requirements and global sustainability initiatives.

Local special circumstances: Lithuania's banking sector has been influenced by the country's efforts to position itself as a fintech-friendly hub within the European Union. The presence of a growing number of fintech companies and the establishment of the Bank of Lithuania as a proactive regulator have contributed to the overall competitiveness and innovation in the banking industry. Traditional banks in Lithuania are leveraging this environment to collaborate with fintechs and explore new opportunities for growth and development.

Underlying macroeconomic factors: The macroeconomic environment in Lithuania, including factors such as economic growth, interest rates, and regulatory policies, plays a significant role in shaping the Traditional Banks market. Economic stability and favorable regulatory frameworks support the growth of the banking sector, while changes in interest rates and consumer confidence can impact the demand for banking products and services. Traditional banks in Lithuania must navigate these macroeconomic factors to sustain their competitiveness and meet the evolving needs of customers 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.