Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Southern Europe

Southern Europe

In Southern Europe, the Traditional Commercial Banking market market is anticipated to witness a significant increase in Net Interest Income, reaching a projected value of US$57.42bn by 2024.
Looking ahead, this market segment is expected to exhibit a compound annual growth rate (CAGR) of -0.92% between 2024 and 2029, ultimately resulting in a market volume of US$54.83bn by the end of the forecast period.
When compared globally, it is worth noting that in China is anticipated to generate the highest Net Interest Income, with a projected value of US$1,444.0bn by 2024.
In Southern Europe, traditional commercial banking remains a dominant force, with established banks like Banco Santander in Spain and Intesa Sanpaolo in Italy leading the market.

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

Customer preferences: Customers in Southern Europe are increasingly looking for personalized banking services that cater to their individual needs. They value face-to-face interactions with bank representatives and prioritize trust and reliability when choosing a bank for their financial needs.

Trends in the market: In countries like Italy and Spain, there is a growing trend towards digitalization in the banking sector. Traditional banks are investing in online and mobile banking platforms to meet the changing needs of customers who are seeking convenience and efficiency in their banking transactions. Additionally, there is a rise in sustainable banking practices, with customers showing interest in banks that prioritize environmental and social responsibility.

Local special circumstances: Southern Europe has a unique banking landscape characterized by a large number of small and medium-sized banks alongside a few major players. This fragmentation in the market creates both challenges and opportunities for traditional commercial banks operating in the region. Competition is fierce, but it also allows for niche banking services to thrive in specific local markets.

Underlying macroeconomic factors: The economic environment in Southern Europe plays a significant role in shaping the traditional commercial banking market. Factors such as low interest rates, regulatory changes, and economic stability impact the profitability and growth potential of banks in the region. As Southern Europe continues to recover from the effects of the financial crisis, banks are adapting their strategies to navigate the evolving economic landscape and meet the needs of their customers.

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.