Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Eastern Africa

Eastern Africa

In Eastern Africa, the Traditional Commercial Banking market market is anticipated to witness a significant growth in Net Interest Income.
According to projections, by 2024, the Net Interest Income is expected to reach US$34.31bn.
Furthermore, it is projected to exhibit an annual growth rate of 6.02% (CAGR 2024-2029), ultimately resulting in a market volume of US$45.95bn by 2029.
When compared globally, it is noteworthy that China will generate the highest Net Interest Income in the Traditional Commercial Banking market sector.
In 2024, China is expected to reach an impressive US$1,444.0bn.
In Eastern Africa, traditional commercial banking is experiencing a shift towards digital banking solutions, as customers increasingly embrace mobile and online banking services.

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 Eastern Africa is experiencing significant growth and development.

Customer preferences: Customers in Eastern Africa are increasingly seeking convenient and accessible banking services. They prefer banks that offer a wide range of digital banking solutions to cater to their evolving needs. Additionally, customers value personalized services and competitive interest rates when choosing a bank for their financial needs.

Trends in the market: In Kenya, there is a growing trend towards mobile banking and digital payment solutions, with a large percentage of the population using mobile money services for their day-to-day transactions. This has led traditional banks to invest more in digital infrastructure to stay competitive in the market. In Tanzania, the market is seeing an increase in the number of bank branches, indicating a push for financial inclusion in both urban and rural areas. Uganda is experiencing a trend towards sustainable banking practices, with customers showing a preference for banks that prioritize environmental and social responsibility.

Local special circumstances: In Ethiopia, the banking sector is undergoing liberalization, opening up opportunities for foreign investors to enter the market. This has led to increased competition among banks, driving innovation and improvement in service offerings. In Rwanda, the government has been actively promoting financial literacy and inclusion, leading to a rise in the number of bank accounts and loans. This presents a unique opportunity for traditional banks to expand their customer base and market share in the country.

Underlying macroeconomic factors: The economic growth and stability in Eastern Africa are contributing to the development of the traditional commercial banking market. With a growing middle class and increasing disposable income, there is a higher demand for banking products and services. Additionally, regulatory reforms and government initiatives aimed at improving the financial sector are creating a conducive environment for the growth of traditional banks in the region.

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.