Traditional Banks - Vietnam

Vietnam

In Vietnam, the projected Net Interest Income in the market segment of Traditional Banks market is expected to reach US$15.63bn in 2024.
Traditional Commercial Banking is the dominant force in this market, with a projected market volume of US$9.51bn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate (CAGR 2024-2029) of 4.91%, resulting in a market volume of US$19.86bn by 2029.
When compared globally, it is noteworthy that China is set to generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Traditional banks in Vietnam are seeing a decline in market share due to the increasing popularity of digital banking services.

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

Vietnam's Traditional Banks market has been experiencing a significant shift in recent years, driven by evolving customer preferences and unique local circumstances.

Customer preferences: Customers in Vietnam are increasingly seeking more personalized and convenient banking services. They are looking for seamless digital banking experiences, including online and mobile banking options. This shift in preferences is pushing traditional banks to invest in technology and innovation to meet the changing needs of their customers.

Trends in the market: In Vietnam, traditional banks are adapting to the rise of digital banking by expanding their online presence and offering a wider range of digital services. This trend is fueled by the growing tech-savvy population in the country, which is driving demand for digital banking solutions. Additionally, traditional banks are focusing on improving customer service and building trust through transparent and reliable banking practices.

Local special circumstances: Vietnam's banking sector is heavily influenced by government regulations and policies. The government plays a significant role in shaping the market through regulations that aim to maintain stability and promote financial inclusion. This regulatory environment impacts the strategies and operations of traditional banks in Vietnam, shaping the competitive landscape and market dynamics.

Underlying macroeconomic factors: The economic growth and stability in Vietnam are also key factors driving the development of the Traditional Banks market. As the economy continues to grow, there is an increasing demand for banking services to support businesses and individuals. This growth presents opportunities for traditional banks to expand their customer base and offerings, driving further development and competition in 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.