Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Mexico

Mexico

In Mexico, the Traditional Commercial Banking market market is expected to witness a significant increase in Net Interest Income, projected to reach US$14.07bn by 2024.
This growth is anticipated to continue at a compound annual growth rate (CAGR 2024-2029) of 5.96%, leading to a market volume of US$18.79bn by 2029.
In comparison to other countries around Worldwide, China is set to generate the highest Net Interest Income, with an estimated value of US$1,444.0bn in 2024.
Traditional Commercial Banking in Mexico is experiencing a shift towards digitalization, with banks investing in technological solutions to enhance customer experience and streamline operations.

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 Mexico has been experiencing notable developments in recent years, driven by various factors shaping the industry landscape.

Customer preferences: Customers in Mexico are increasingly seeking personalized banking services that cater to their specific needs and preferences. This shift towards customized solutions has prompted traditional commercial banks to enhance their offerings and customer service to stay competitive in the market. Additionally, there is a growing demand for digital banking services, leading banks to invest in technology to provide seamless online and mobile banking experiences.

Trends in the market: One prominent trend in the Mexican Traditional Commercial Banking market is the consolidation of smaller banks to create larger, more resilient financial institutions. This trend is partly driven by regulatory requirements and the need for banks to achieve economies of scale to remain profitable in a competitive environment. Moreover, there is a growing focus on sustainable banking practices, with banks incorporating environmental, social, and governance (ESG) criteria into their operations and investment decisions.

Local special circumstances: Mexico's Traditional Commercial Banking market is influenced by unique local circumstances, such as the country's regulatory environment and economic conditions. Regulatory changes, such as updates to banking laws and requirements, can impact how banks operate and compete in the market. Additionally, economic factors, including interest rates and inflation, play a significant role in shaping the lending and investment activities of commercial banks in Mexico.

Underlying macroeconomic factors: Macroeconomic factors, such as GDP growth, inflation rates, and foreign investment, have a substantial impact on the Traditional Commercial Banking market in Mexico. Economic stability and growth can lead to increased lending opportunities for banks, while economic downturns may result in higher loan defaults and reduced profitability. Moreover, global economic trends and geopolitical events can also influence the Mexican banking sector, highlighting the interconnected nature of the industry with 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.