Banking - Western Asia

Western Asia

In 2024, the projected Net Interest Income in the Banking market of Western Asia is expected to reach a staggering US$328.20bn.
Traditional Banks are set to dominate this market segment, with a projected market volume of US$297.70bn in the same year.
Looking ahead, Net Interest Income is expected to exhibit a modest annual growth rate (CAGR 2024-2029) of 2.84%, resulting in a market volume of US$377.60bn by 2029.
When it comes to global comparison, it is worth noting that the highest Net Interest Income will be generated China, with an estimated value of US$4,332.0bn in 2024.
This showcases the significant role that China plays in the global Banking market industry.
In Western Asia, the banking industry is experiencing a trend towards digitalization, with a shift towards online banking and mobile payment solutions.

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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Currency

Analyst Opinion

The Banking market in Western Asia is experiencing a significant transformation driven by various factors.

Customer preferences: Customers in Western Asia are increasingly demanding digital banking services that offer convenience and accessibility. The shift towards online and mobile banking platforms is driven by the region's tech-savvy population and the desire for efficient financial solutions.

Trends in the market: In countries like the United Arab Emirates and Saudi Arabia, traditional brick-and-mortar banks are embracing digital innovation to stay competitive in the market. Fintech companies are also gaining traction, offering alternative banking solutions that cater to the evolving needs of customers. Moreover, there is a growing trend towards Islamic banking in the region, reflecting the cultural and religious preferences of the population.

Local special circumstances: Western Asia is home to a diverse population with varying levels of financial inclusion. While urban centers like Dubai and Doha boast advanced banking infrastructure, rural areas in countries like Oman and Jordan still face challenges in accessing basic banking services. This disparity is driving efforts to promote financial literacy and expand banking networks to underserved communities.

Underlying macroeconomic factors: The economic diversification efforts in countries like Qatar and Kuwait are creating new opportunities for the banking sector to support emerging industries. Additionally, the region's strategic location as a global trade hub is attracting foreign investments, leading to increased demand for banking services that facilitate international transactions. As Western Asia continues to position itself as a financial hub, the banking market is poised for further growth and innovation.

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.