Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Canada

Canada

In Canada, the Traditional Commercial Banking market market is anticipated to witness a significant increase in Net Interest Income, projected to reach US$38.58bn in 2024.
Looking ahead, the market is expected to maintain a steady growth rate, with a Compound Annual Growth Rate (CAGR 2024-2029) of -0.41%.
This growth trajectory will result in a market volume of US$37.80bn by 2029.
When compared to other countries globally, it is noteworthy that China will generate the highest Net Interest Income, estimated to be US$1,444.0bn in 2024.
With the rise of digital banking, traditional commercial banks in Canada are embracing technology to enhance customer experience and remain competitive.

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

Over the past few years, the Traditional Commercial Banking market in Canada has been experiencing notable developments and shifts.

Customer preferences: Customers in Canada are increasingly seeking more personalized and convenient banking services, driving the traditional commercial banks in the country to invest in digital transformation and innovation. This shift is in line with global trends where customers are demanding seamless online banking experiences and access to a wide range of digital financial products.

Trends in the market: One prominent trend in the Canadian Traditional Commercial Banking market is the rise of challenger banks and fintech companies offering competitive alternatives to traditional banks. These new entrants are leveraging technology to provide agile and customer-centric banking solutions, posing a challenge to established banks. As a response, traditional banks in Canada are focusing on enhancing their digital capabilities, streamlining operations, and improving customer engagement to stay competitive in the evolving landscape.

Local special circumstances: Canada's banking sector is dominated by a few major players, leading to a highly concentrated market. This concentration poses challenges for new entrants looking to establish themselves in the market. Additionally, regulatory requirements in Canada are stringent, creating barriers to entry for foreign banks and fostering a stable banking environment dominated by domestic players.

Underlying macroeconomic factors: The economic stability and steady growth of the Canadian economy play a significant role in shaping the Traditional Commercial Banking market. Favorable economic conditions, such as low unemployment rates and a resilient banking system, contribute to the overall growth and profitability of banks in Canada. Moreover, government policies and regulations aimed at promoting financial stability and consumer protection influence the operations and strategies of traditional commercial banks in the country.

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.