Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - ASEAN

ASEAN

In ASEAN, the Traditional Commercial Banking market market is anticipated to witness a significant increase in Net Interest Income, with projections indicating a figure of US$56.60bn by the year 2024.
Moreover, it is expected that this sector will demonstrate a steady annual growth rate (CAGR 2024-2029) of 3.60%, which will lead to a market volume of US$67.55bn by 2029.
When considering global comparisons, it is worth mentioning that China is projected to generate the highest Net Interest Income, amounting to US$1,444.0bn in 2024.
In the ASEAN region, traditional commercial banking in Singapore is thriving due to its robust financial sector and strong regulatory framework.

Key regions: China, France, Brazil, Singapore, India

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

Structure:

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 Commercial Banking market in ASEAN is experiencing significant growth and development driven by various factors.

Customer preferences: Customers in the ASEAN region are increasingly looking for convenient and efficient banking services. With the rise of digitalization, there is a growing demand for online and mobile banking solutions that offer flexibility and accessibility. Moreover, customers are seeking personalized services that cater to their specific needs and preferences.

Trends in the market: In Indonesia, there is a trend towards the expansion of branch networks in rural areas to reach unbanked populations. This initiative is aimed at promoting financial inclusion and driving economic growth in underserved regions. Additionally, the Philippines is witnessing a surge in digital payment solutions, with more customers opting for cashless transactions and mobile banking services.

Local special circumstances: In Malaysia, the Islamic banking sector is gaining prominence due to the country's large Muslim population. As a result, traditional commercial banks are increasingly offering Islamic banking products to cater to the specific religious requirements of customers. This trend is shaping the banking landscape in Malaysia and influencing the overall market dynamics.

Underlying macroeconomic factors: The economic growth and stability in the ASEAN region are playing a crucial role in the development of the Traditional Commercial Banking market. As countries in the region experience steady economic expansion, there is an increase in demand for banking services to support business activities and consumer spending. Additionally, favorable government policies and regulatory frameworks are creating a conducive environment for the growth of the banking sector in ASEAN.

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.