Traditional Banks - Southern Europe

Southern Europe

In Southern Europe, the market segment of Traditional Banks market is anticipated to witness significant growth.
The projected Net Interest Income in this market is expected to reach a substantial value of US$90.93bn in 2024.
Traditional Commercial Banking, in particular, holds a dominant position in this market with a projected market volume of US$57.42bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit a steady annual growth rate (CAGR 2024-2029) of -1.37%.
This growth trajectory would result in a market volume of US$84.88bn by 2029.
When considering the global landscape, it is noteworthy that China is anticipated to generate the highest Net Interest Income.
In the year 2024, China's Net Interest Income is projected to reach a staggering US$3,869.0bn.
Traditional banks in Southern Europe are struggling to compete with digital disruptors, leading to a decline in customer loyalty.

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

In recent years, the Traditional Banks market in Southern Europe has been experiencing significant changes and developments.

Customer preferences: Customers in Southern Europe are increasingly seeking personalized and convenient banking services. They value traditional banks that offer a combination of in-person services through branches and digital solutions. This shift in preferences has led traditional banks to invest in digital transformation to meet the evolving needs of their customers.

Trends in the market: In Italy, traditional banks are focusing on enhancing their online and mobile banking platforms to improve customer experience and compete with digital-only banks. Additionally, there is a growing trend of traditional banks forming partnerships with fintech companies to offer innovative financial products and services to their customers. In Spain, traditional banks are expanding their wealth management and investment services to cater to the demand for personalized financial advice. Moreover, there is a trend of traditional banks renovating their branch networks to create more welcoming and modern spaces for customers.

Local special circumstances: In Greece, the Traditional Banks market is facing challenges due to the economic instability in the region. Traditional banks are working towards increasing their efficiency and profitability to navigate through the uncertain economic conditions. Additionally, there is a growing trend of consolidation in the Greek banking sector as banks seek to strengthen their positions in the market.

Underlying macroeconomic factors: The low-interest-rate environment in Southern Europe is impacting the profitability of traditional banks, pushing them to explore new revenue streams and cost-cutting measures. Furthermore, regulatory changes and compliance requirements are shaping the operating landscape for traditional banks in the region. Overall, the Traditional Banks market in Southern Europe is adapting to the changing customer preferences, market trends, and macroeconomic factors to remain competitive and sustainable in the evolving financial industry.

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.