Banking - Turkey

Turkey

In 2024, it is projected that the Net Interest Income in the Banking market in Turkey will reach US$13.21bn.
The market is dominated by Traditional Banks, with a projected market volume of US$11.21bn in the same year.
Looking ahead, the Net Interest Income is expected to demonstrate an annual growth rate (CAGR 2024-2029) of -1.48%, which would result in a market volume of US$12.26bn by 2029.
When compared globally, it is noteworthy that China is anticipated to generate the highest Net Interest Income, amounting to US$4,332.0bn in 2024.
Turkey's banking sector is experiencing a surge in digital banking services, with mobile banking apps gaining popularity among tech-savvy customers.

Key regions: United States, China, Japan, Brazil, United Kingdom

Definition:

The Banking market refers to the financial services sector providing financial products and services to individuals and businesses. 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.

Structure:

The market consists of two segments:
- The Traditional Banking 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.
- The Digital Banking market refers to the emerging market for digital-only banks that offer financial services through online and mobile platforms.

The market data comprises 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.

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 & Commercial banking market, creating opportunities for new entrants, and forcing existing players to adapt.
Key players in this market are companies such as the Industrial and Commercial Bank of China Ltd., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Banking market in Turkey has been experiencing significant growth and transformation in recent years.

Customer preferences: Customers in Turkey are increasingly demanding digital banking services, leading to a surge in online and mobile banking usage. Convenience, speed, and accessibility are driving factors for customers preferring digital channels over traditional brick-and-mortar branches.

Trends in the market: One prominent trend in the Turkish Banking market is the rise of neobanks and fintech companies offering innovative financial solutions. These digital disruptors are challenging traditional banks by providing personalized services, lower fees, and enhanced customer experiences. Additionally, there is a growing interest in sustainable and ethical banking practices among Turkish consumers, influencing banks to incorporate environmental and social considerations into their operations.

Local special circumstances: Turkey's unique geographical position as a bridge between Europe and Asia has positioned its banking sector as a gateway for international financial transactions. This has attracted foreign investments and partnerships, fostering competition and innovation within the market. Moreover, regulatory reforms and government initiatives to promote financial inclusion have contributed to the expansion and diversification of banking services across the country.

Underlying macroeconomic factors: The macroeconomic landscape in Turkey, including factors such as GDP growth, inflation rates, and interest rates, plays a crucial role in shaping the banking market. Economic stability and growth prospects influence consumer confidence, investment decisions, and overall banking activities. Additionally, currency exchange rates and geopolitical developments can impact the performance and competitiveness of banks operating in Turkey.

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.