Market Insights Financial Banking Traditional Banks

Traditional Retail Banking - Nigeria

Nigeria

In Nigeria, the Traditional Retail Banking market market is anticipated to witness a significant increase in Net Interest Income, projected to reach US$42.57bn by the year 2024.
Furthermore, it is expected that the Net Interest Income will exhibit a compound annual growth rate (CAGR 2024-2029) of -12.02%, ultimately culminating in a market volume of US$22.44bn by 2029.
When comparing this data on a global scale, it is noteworthy that China is poised to generate the highest Net Interest Income, with an estimated value of US$2,426.0bn in 2024.
In Nigeria, traditional retail banking is experiencing a shift towards digital platforms and mobile banking services.

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

The Traditional Retail Banking market in Nigeria is experiencing a significant shift driven by changing customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Customers in Nigeria are increasingly seeking convenient and efficient banking services, leading to a growing demand for digital banking solutions. The preference for mobile and online banking is driven by the need for 24/7 access to banking services, ease of transactions, and the convenience of managing finances remotely.

Trends in the market: One of the key trends in the Traditional Retail Banking market in Nigeria is the rapid adoption of digital banking channels. Traditional banks are investing in technology to offer services such as mobile banking apps, internet banking, and digital wallets to cater to the evolving needs of tech-savvy customers. Additionally, there is a rise in partnerships between banks and fintech companies to enhance service delivery and customer experience.

Local special circumstances: Nigeria's retail banking market is unique due to the large unbanked population in the country. As a result, there is a significant opportunity for banks to expand their customer base by offering inclusive banking solutions tailored to the needs of underserved communities. Moreover, the regulatory environment in Nigeria plays a crucial role in shaping the retail banking landscape, influencing market competition, innovation, and customer protection.

Underlying macroeconomic factors: The growth of the Traditional Retail Banking market in Nigeria is also influenced by macroeconomic factors such as population growth, urbanization, and increasing disposable income. As more Nigerians move to urban areas and experience rising income levels, there is a higher demand for banking products and services, driving market expansion. Additionally, government initiatives to promote financial inclusion and digital literacy are further propelling the development of the retail banking sector in Nigeria.

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.