Traditional Banks - New Zealand

New Zealand

In 2024, the projected Net Interest Income in the Traditional Banks market market of New Zealand is estimated to reach US$11.92bn.
The market is predominantly dominated by Traditional Commercial Banking, which is expected to have a projected market volume of US$9.45bn in the same year.
Looking ahead, the Net Interest Income is forecasted to exhibit an annual growth rate (CAGR 2024-2029) of -1.34%, leading to a market volume of US$11.14bn by 2029.
In terms of global comparison, China is anticipated to generate the highest Net Interest Income, amounting to US$3,869.0bn in 2024.
New Zealand's traditional banks are facing increasing competition from digital banks, forcing them to invest in technology and innovation to stay relevant.

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

Traditional banking in New Zealand is experiencing notable shifts and developments in response to changing customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in New Zealand are increasingly seeking personalized and convenient banking services. They value seamless digital experiences, such as online and mobile banking, as well as quick access to customer support. Additionally, there is a growing preference for sustainable and socially responsible banking practices among consumers.

Trends in the market: One prominent trend in the New Zealand traditional banking market is the rise of digital banking solutions. Traditional banks are investing heavily in technology to enhance their digital offerings, including mobile apps, online account management, and digital payment options. Moreover, there is a noticeable shift towards branch consolidation and the adoption of automation to streamline operations and reduce costs.

Local special circumstances: New Zealand's relatively small population and geographic dispersion present unique challenges for traditional banks. As a result, banks in the country are focusing on optimizing their branch networks and digital channels to reach customers across diverse locations. Furthermore, regulatory requirements and compliance standards in New Zealand play a significant role in shaping the operations and offerings of traditional banks in the market.

Underlying macroeconomic factors: The overall economic environment in New Zealand, including factors such as interest rates, inflation, and GDP growth, influences the performance of traditional banks. Economic stability and growth can lead to increased demand for banking services, while economic downturns may result in higher loan defaults and reduced profitability for banks. Additionally, demographic shifts and changing consumer behavior patterns impact the long-term outlook for the traditional banking sector in New Zealand.

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.