Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - MENA

MENA

Net Interest Income in the Traditional Commercial Banking market is projected to reach US$150.50bn in 2024.
Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 3.90%, resulting in a market volume of US$182.20bn by 2029.
In global comparison, most Net Interest Income will be generated in China (US$1,444.0bn in 2024).

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 MENA is experiencing notable developments and trends that are shaping the industry landscape.

Customer preferences: Customers in the MENA region are increasingly seeking personalized banking solutions tailored to their specific needs and preferences. They value convenience, digital banking services, and efficient customer support. As a result, traditional commercial banks are investing in technology to enhance their digital offerings and improve the overall customer experience.

Trends in the market: In Saudi Arabia, the Traditional Commercial Banking market is witnessing a shift towards sustainable and socially responsible banking practices. With the government's focus on Vision 2030 and sustainable development, banks are incorporating environmental, social, and governance (ESG) criteria into their business strategies. This trend is driven by increasing awareness among customers about the importance of sustainability and ethical banking practices. In the UAE, the Traditional Commercial Banking market is experiencing a rise in demand for Islamic banking products and services. As a hub for Islamic finance, banks in the UAE are expanding their Sharia-compliant offerings to cater to the growing Muslim population seeking banking solutions that align with their religious beliefs. This trend is driving innovation in Islamic banking products and services, attracting a wider customer base.

Local special circumstances: In Egypt, the Traditional Commercial Banking market is influenced by regulatory reforms aimed at enhancing financial inclusion and promoting economic growth. The government's initiatives to modernize the banking sector and improve access to financial services are creating opportunities for traditional banks to expand their reach and serve a larger customer base. This regulatory environment is encouraging innovation and competition in the market, leading to the development of new banking products and services.

Underlying macroeconomic factors: The Traditional Commercial Banking market in MENA is also influenced by macroeconomic factors such as oil prices, geopolitical stability, and economic diversification efforts. Fluctuations in oil prices impact the region's economic stability and consumer confidence, which in turn affect the banking sector. Geopolitical tensions and regional conflicts can create uncertainty in the market, influencing investment decisions and overall banking activities. Additionally, efforts to diversify the economy away from oil dependence are driving growth in non-oil sectors, presenting opportunities and challenges for traditional commercial 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.