Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Lebanon

Lebanon

In Lebanon, the Traditional Commercial Banking market market is expected to witness a significant increase in Net Interest Income, reaching US$3.37bn in 2024.
This projection reflects the revenue generated from interest on loans and investments.
Moreover, the sector is anticipated to exhibit a Compound Annual Growth Rate (CAGR) of 9.27% between 2024 and 2029, resulting in a market volume of US$5.25bn by the end of 2029.
When considering the global landscape, it is noteworthy that China is poised to generate the highest Net Interest Income.
In 2024, China's Traditional Commercial Banking market market is projected to reach a staggering US$1,444.0bn, highlighting its significant role in the global financial sector.
In Lebanon, traditional commercial banking remains a dominant force in the financial sector, offering stability and trusted services to businesses and individuals alike.

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 Lebanon is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Customers in Lebanon are increasingly seeking digital banking solutions that offer convenience and efficiency. The demand for online and mobile banking services has been on the rise as customers look for ways to manage their finances remotely. Additionally, there is a growing interest in personalized services and tailored financial products that meet the specific needs of individual customers.

Trends in the market: One of the significant trends in the Traditional Commercial Banking market in Lebanon is the focus on innovation and technology. Banks are investing in digital transformation to enhance customer experience and streamline operations. This includes the adoption of artificial intelligence, data analytics, and blockchain technology to offer more efficient services. Moreover, there is a trend towards sustainable banking practices, with banks incorporating environmental and social considerations into their business strategies.

Local special circumstances: Lebanon's banking sector has been facing challenges due to the country's economic and political instability. The banking sector has been impacted by currency devaluation, capital controls, and a liquidity crisis. These factors have put pressure on banks to adapt their business models and find new ways to generate revenue. Additionally, the banking sector in Lebanon is known for its strict banking secrecy laws, which have attracted deposits from regional and international clients seeking confidentiality.

Underlying macroeconomic factors: The Traditional Commercial Banking market in Lebanon is influenced by various macroeconomic factors, including inflation, interest rates, and foreign exchange rates. Economic uncertainty and political instability have contributed to a volatile business environment, affecting the profitability and stability of banks. Furthermore, the country's high public debt levels and fiscal deficits have put pressure on the banking sector to support government financing needs. Overall, the Traditional Commercial Banking market in Lebanon is navigating through a challenging landscape marked by evolving customer preferences, technological advancements, and local economic conditions.

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.