Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Iran

Iran

In Iran, the Traditional Commercial Banking market market is anticipated to witness a significant growth in Net Interest Income, with a projected value of US$42.71bn in 2024.
This growth is expected to continue at a compound annual growth rate (CAGR) of 2.65% between 2024 and 2029, leading to a market volume of US$48.68bn by 2029.
When compared to other countries, China is expected to generate the highest Net Interest Income in the Traditional Commercial Banking market sector, with a value of US$1,444.0bn in 2024.
Iran's traditional commercial banking sector is experiencing a surge in demand for loans as the country seeks to modernize its economy and attract foreign investment.

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 Iran is experiencing significant growth and development driven by various factors.

Customer preferences: Customers in Iran are increasingly seeking traditional banking services due to a cultural preference for in-person interactions and a strong emphasis on trust and relationships in business dealings. This has led to a continued demand for brick-and-mortar bank branches where customers can engage directly with bank representatives.

Trends in the market: One notable trend in the Iranian Traditional Commercial Banking market is the modernization of services and infrastructure to meet the evolving needs of customers. Banks are investing in digital technologies to improve efficiency and customer experience, while still maintaining the personal touch that is valued by Iranian customers. Additionally, there is a growing focus on offering a wider range of financial products and services to cater to diverse customer needs.

Local special circumstances: Iran's banking sector operates within a unique regulatory environment due to international sanctions that have limited access to global financial systems. This has led to a more insular banking market, with domestic banks playing a dominant role in serving the financial needs of businesses and individuals. Despite these challenges, Iranian banks have shown resilience and adaptability in navigating the complex regulatory landscape.

Underlying macroeconomic factors: The development of the Traditional Commercial Banking market in Iran is also influenced by macroeconomic factors such as inflation, interest rates, and government policies. Economic stability and regulatory reforms play a crucial role in shaping the growth trajectory of the banking sector. As Iran continues to navigate geopolitical uncertainties and economic challenges, the Traditional Commercial Banking market will likely see further evolution and innovation to meet the changing needs of customers and the broader economy.

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.