Traditional Banks - Northern Africa

Northern Africa

In 2024, the Net Interest Income in the Traditional Banks market market of Northern Africa is estimated to reach US$65.21bn.
Traditional Retail Banking is the dominant segment in this market, with a projected market volume of US$35.18bn in the same year.
Looking ahead, the Net Interest Income is expected to exhibit a compound annual growth rate (CAGR 2024-2029) of 5.80%.
This growth will result in a market volume of US$86.46bn by 2029.
When compared globally, it is noteworthy that China will generate the highest Net Interest Income, amounting to US$3,869.0bn in 2024.
Traditional banks in Northern Africa are facing increased competition from digital banking solutions, forcing them to adapt and innovate to stay relevant in the market.

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 Northern Africa is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Customers in Northern Africa are increasingly seeking convenience and efficiency in their banking services. This has led to a growing demand for digital banking solutions that offer easy access to services such as online banking, mobile payments, and e-wallets. Additionally, customers are placing a higher value on personalized services and tailored financial products that meet their specific needs and preferences.

Trends in the market: One of the key trends in the Traditional Banks market in Northern Africa is the expansion of Islamic banking services. With a significant Muslim population in the region, there is a growing demand for Sharia-compliant banking products and services. Traditional banks are increasingly offering Islamic banking options to cater to this market segment. Another trend is the focus on financial inclusion, with banks in the region working towards providing banking services to the unbanked population through initiatives such as mobile banking and agent banking.

Local special circumstances: Political and economic stability play a crucial role in shaping the Traditional Banks market in Northern Africa. Countries in the region have been focusing on implementing reforms to improve the business environment and attract foreign investment. These efforts are positively impacting the banking sector by creating opportunities for growth and expansion. Additionally, the regulatory environment and government policies also influence the operations of traditional banks in the region.

Underlying macroeconomic factors: The economic growth and demographic trends in Northern Africa are driving the development of the Traditional Banks market. With a young and growing population, there is an increasing need for banking services to support economic activities and financial transactions. The region's GDP growth and rising disposable incomes are also contributing to the expansion of the banking sector. Moreover, advancements in technology and digital infrastructure are further fueling the growth of traditional banks in Northern Africa.

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.