Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Pakistan

Pakistan

In Pakistan, the Traditional Commercial Banking market market is expected to witness a significant increase in Net Interest Income, reaching a projected value of US$5.47bn by 2024.
This indicates a positive trend in the financial sector of the country.
Furthermore, it is anticipated that the Net Interest Income will continue to grow at a compound annual growth rate (CAGR) of 4.69% from 2024 to 2029.
As a result, the market volume is estimated to reach US$6.88bn by the end of 2029.
When compared globally, it is noteworthy that China is set to generate the highest Net Interest Income in the Traditional Commercial Banking market sector.
In 2024, China's Net Interest Income is projected to reach an impressive US$1,444.0bn.
This highlights the dominance of the Chinese banking industry and its significant contribution to the global financial landscape.
Pakistan's traditional commercial banking sector is experiencing a surge in digitalization, as financial institutions adapt to the changing consumer preferences and technological advancements in the country.

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

In Pakistan, the Traditional Commercial Banking market is experiencing notable developments driven by shifting customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in Pakistan are increasingly seeking convenience, efficiency, and personalized services from traditional commercial banks. With the rise of digital banking solutions and mobile payment options, customers are leaning towards banks that offer seamless online banking experiences and innovative financial products. Additionally, there is a growing demand for sustainable banking practices and socially responsible investments among customers in Pakistan.

Trends in the market: One key trend in the Traditional Commercial Banking market in Pakistan is the expansion of Islamic banking services. As a predominantly Muslim country, Pakistan has seen a significant increase in the demand for Sharia-compliant banking products and services. This trend is driving traditional commercial banks to offer a wider range of Islamic financial products to cater to the needs of this segment of the population. Moreover, strategic partnerships and collaborations between traditional banks and fintech companies are on the rise in Pakistan, leading to the development of new digital banking solutions and enhanced customer experiences.

Local special circumstances: Political and regulatory factors play a significant role in shaping the Traditional Commercial Banking market in Pakistan. The regulatory environment in the country influences the operations and growth strategies of traditional banks. Moreover, the economic stability and security situation in Pakistan impact consumer confidence and investment decisions, thereby affecting the overall performance of the banking sector. Additionally, the presence of a large unbanked population in Pakistan presents both challenges and opportunities for traditional commercial banks to expand their reach and financial inclusion efforts.

Underlying macroeconomic factors: Macroeconomic factors such as interest rates, inflation, and foreign exchange rates have a direct impact on the Traditional Commercial Banking market in Pakistan. Fluctuations in these macroeconomic indicators can influence lending practices, deposit rates, and overall profitability of traditional banks in the country. Moreover, economic growth, trade policies, and global market trends contribute to the overall stability and growth potential of the banking sector in Pakistan.

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.