Traditional Banks - Uganda

Uganda

In 2024, it is projected that the net interest income in the Traditional Banks market market in Uganda will reach US$559.30m.
Traditional Commercial Banking is the dominant market segment, with a projected market volume of US$371.00m in 2024.
Looking ahead, the net interest income is expected to exhibit an annual growth rate (CAGR 2024-2029) of -1.37%, resulting in a market volume of US$522.00m by 2029.
When compared globally, the highest net interest income is anticipated to be generated China, amounting to US$3,869.0bn in 2024.
Traditional banks in Uganda are facing increasing competition from digital financial services, forcing them to adapt and innovate to stay relevant in the market.

Key regions: Germany, United Kingdom, France, Japan, China

Definition:

The Traditional Retail and Commercial Banks market refers to the financial services sector that provides a range of financial products and services to individuals and businesses through store-based branches and other traditional channels. Retail banking focuses on offering financial services to individual consumers, such as personal loans, savings and checking accounts, credit cards, and mortgages. Commercial banking, on the other hand, provides financial services to small and large businesses, including loans, lines of credit, and other financial products designed specifically for businesses.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These 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.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

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 Banks market in Uganda has been experiencing notable developments and trends in recent years.

Customer preferences: Customers in Uganda are increasingly seeking out traditional banks for their financial needs due to the trust and reliability associated with these institutions. The preference for face-to-face interactions and personalized services offered by traditional banks remains strong in the Ugandan market.

Trends in the market: One of the key trends in the Traditional Banks market in Uganda is the expansion of branch networks into rural areas. Traditional banks are focusing on reaching the unbanked population in remote regions, driving financial inclusion and expanding their customer base. Additionally, there is a growing trend towards digital transformation among traditional banks in Uganda, with a focus on enhancing online banking services and mobile banking apps to cater to the tech-savvy population.

Local special circumstances: Uganda's regulatory environment plays a significant role in shaping the Traditional Banks market. The Central Bank of Uganda has been implementing policies to promote stability and growth in the banking sector, which has led to increased confidence among customers. Moreover, the presence of a large informal economy in Uganda drives the demand for traditional banking services as individuals and businesses look for secure and regulated financial solutions.

Underlying macroeconomic factors: The stability of Uganda's economy and the steady GDP growth rate have contributed to the development of the Traditional Banks market. As the country continues to experience economic growth, there is an increasing demand for banking services to support various sectors such as agriculture, manufacturing, and services. The favorable macroeconomic conditions have created opportunities for traditional banks to expand their operations and introduce innovative products to meet the evolving needs of 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.