Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Nepal

Nepal

In Nepal, the Traditional Retail Banking market market is anticipated to witness a significant growth in Net Interest Income.
It is projected to reach US$1.27bn in 2024.
Looking ahead, the Net Interest Income is expected to exhibit a compound annual growth rate (CAGR 2024-2029) of 4.73%.
This growth trajectory will lead to a market volume of US$1.60bn by 2029.
In a global context, it is worth noting that China will continue to dominate in terms of Net Interest Income generation.
In 2024, China is expected to generate a substantial amount of US$2,426.0bn.
Despite the rapid growth of digital banking services, traditional retail banking remains the dominant choice among Nepalese consumers.

Key regions: France, Brazil, Germany, United Kingdom, United States

Definition:
Traditional retail banking refers to the financial services sector that provides a range of financial products and services to individual consumers through store-based branches and other traditional channels. These services include personal loans, savings and checking accounts, credit cards, mortgages, and other financial products designed specifically for individual consumers.
Traditional retail banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
Despite facing increased competition and changing customer preferences, traditional retail banks continue to play a vital role in the financial landscape. They are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services.
Overall, traditional retail banking provides a wide range of financial services to individual consumers through established, trusted channels and continues to be an important part of the financial landscape.

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., Bank of America Corp., and BNP Paribas.

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Analyst Opinion

Nepal, a country known for its rich cultural heritage and stunning landscapes, is also experiencing interesting developments in its Traditional Retail Banking market.

Customer preferences: In Nepal, customers still value face-to-face interactions and personalized services when it comes to banking. The human touch in banking relationships remains crucial for many Nepalese customers, leading to a preference for traditional brick-and-mortar bank branches over digital banking channels.

Trends in the market: One notable trend in the Traditional Retail Banking market in Nepal is the gradual shift towards digitization. While traditional banking methods are still predominant, there is a growing interest in digital banking services among the younger population and urban areas. This trend is driven by the increasing penetration of smartphones and the internet, making digital banking more accessible to a wider audience.

Local special circumstances: Nepal's topographical diversity poses a unique challenge for the Traditional Retail Banking sector. The difficult terrain and scattered population make it challenging to establish physical bank branches in remote areas. As a result, many Nepalese rely on alternative banking channels such as agent banking and mobile banking services to access financial services conveniently.

Underlying macroeconomic factors: The political stability and economic growth in Nepal play a significant role in shaping the Traditional Retail Banking market. As the country continues to stabilize its political environment and experience steady economic growth, there is a growing demand for banking services to support the expanding economy. This presents opportunities for traditional banks to innovate and expand their reach to untapped markets while also catering to the evolving needs of the population.

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.