Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Asia

Asia

In Asia, specifically in the country of China, the Traditional Commercial Banking market market is expected to witness significant growth.
According to projections, the Net Interest Income in this market is set to reach a staggering amount of €1,339.0bn in 2024.
This indicates the dominance of China in generating the highest Net Interest Income compared to other countries globally.
Looking ahead, the market is anticipated to continue its upward trajectory, with an estimated annual growth rate (CAGR 2024-2029) of 5.75%.
By 2029, the Net Interest Income in the Traditional Commercial Banking market market is projected to expand further, reaching a market volume of €2.50tn.
This growth reflects the increasing demand and profitability in the sector.
It is important to note that these figures pertain specifically to the Traditional Commercial Banking market market segment withAsia.
This segment encompasses various banking activities, such as lending, deposits, and other interest-based income.
In Japan's traditional commercial banking market, there is a growing trend towards digitalization and the adoption of fintech solutions to enhance customer experience and streamline operations.

Key regions: China, France, Brazil, Singapore, India

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

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., JPMorgan Chase & Co., and HSBC Holdings.

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Analyst Opinion

The Traditional Commercial Banking market in Asia is experiencing a shift in customer preferences, trends, and local special circumstances driving its development.

Customer preferences: Customers in Asia are increasingly seeking personalized banking services, digital solutions, and convenient access to financial products. They value efficiency, security, and innovation in their banking experience, leading to a growing demand for online and mobile banking services. Moreover, there is a preference for traditional banks that offer a wide range of financial products and services under one roof, catering to diverse financial needs.

Trends in the market: In countries like Japan, South Korea, and Singapore, there is a trend towards consolidation in the traditional commercial banking sector. Mergers and acquisitions are reshaping the competitive landscape, with larger banks gaining market share and expanding their reach. Additionally, there is a growing emphasis on sustainable finance and green banking practices, driven by increasing awareness of environmental issues among customers and regulators.

Local special circumstances: In China, the traditional commercial banking market is heavily influenced by government policies and regulations. State-owned banks dominate the sector, playing a crucial role in financing economic development initiatives. The regulatory environment, including capital requirements and lending restrictions, shapes the operations and strategies of banks in the country. Moreover, the rise of fintech companies and digital payment platforms poses a challenge to traditional banks in capturing market share and retaining customers.

Underlying macroeconomic factors: The economic growth and demographic trends in Asia are significant drivers of the traditional commercial banking market. Rapid urbanization, a growing middle class, and increasing disposable incomes are fueling demand for banking services and credit products. Additionally, the low-interest-rate environment and changing regulatory landscape impact the profitability and risk management practices of banks in the region. Geopolitical factors and global economic uncertainties also influence market dynamics and investment decisions in the traditional commercial banking sector in Asia.

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.