Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - United Arab Emirates

United Arab Emirates

In the United Arab Emirates, the Traditional Commercial Banking market market is expected to witness a significant increase in Net Interest Income.
By 2024, it is projected to reach a value of US$5.40bn.
This represents a substantial contribution to the overall market.
Furthermore, the Net Interest Income in this segment is anticipated to exhibit a consistent growth pattern.
With a compound annual growth rate (CAGR 2024-2029) of 5.63%, the market volume is estimated to reach US$7.10bn by 2029.
This demonstrates a positive trend in the profitability and stability of the sector.
When comparing the global landscape, it is noteworthy that China is expected 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.
This showcases the immense scale and significance of the Chinese banking sector in the global context.
The United Arab Emirates' traditional commercial banking market is experiencing a surge in digital banking services to cater to the tech-savvy population.

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 United Arab Emirates is experiencing significant growth and development, driven by various factors influencing customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in the UAE are increasingly valuing personalized services, innovative digital banking solutions, and convenient access to banking services. The demand for tailored financial products, efficient customer service, and seamless digital banking experiences is shaping the landscape of traditional commercial banking in the country.

Trends in the market: One prominent trend in the UAE's Traditional Commercial Banking market is the rapid digital transformation taking place within the sector. Banks are investing heavily in digital technologies to enhance customer experience, improve operational efficiency, and stay competitive in the market. Additionally, there is a growing trend towards sustainable and socially responsible banking practices, with customers showing interest in banks that prioritize environmental and social initiatives.

Local special circumstances: The UAE's position as a global financial hub, with a diverse population and a high concentration of expatriates, presents unique opportunities and challenges for traditional commercial banks. The presence of multinational corporations, government entities, and high-net-worth individuals in the country influences the demand for specialized banking services and wealth management solutions.

Underlying macroeconomic factors: The macroeconomic stability, government initiatives to promote economic diversification, and the country's strategic location as a gateway between East and West are key factors driving the growth of the Traditional Commercial Banking market in the UAE. Additionally, the low interest rate environment and regulatory reforms aimed at enhancing transparency and governance in the banking sector are impacting the overall dynamics of the market.

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.