Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - United Kingdom

United Kingdom

In the United Kingdom, the Traditional Commercial Banking market market is anticipated to witness a substantial increase in Net Interest Income, with projections suggesting a figure of €106.80bn by 2024.
Moreover, it is expected that this sector will experience a steady annual growth rate (CAGR 2024-2029) of -0.74%, ultimately leading to a market volume of €102.90bn by 2029.
Comparatively, China is forecasted to generate the highest Net Interest Income globally, amounting to €1,339.0bn in 2024.
The United Kingdom's traditional commercial banking sector has seen a significant shift towards digitalization and online banking services.

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 United Kingdom has been experiencing notable developments and trends in recent years.

Customer preferences: Customers in the Traditional Commercial Banking market in the United Kingdom are increasingly seeking digital banking solutions and personalized services. With the rise of fintech companies offering innovative financial products, traditional banks are adapting by enhancing their online and mobile banking platforms to meet customer expectations for convenience and efficiency.

Trends in the market: One prominent trend in the Traditional Commercial Banking market in the United Kingdom is the consolidation of smaller banks and branches. As larger banks streamline their operations to cut costs and improve profitability, they are closing down physical branches and focusing more on digital channels. This trend is reshaping the competitive landscape of the market and driving traditional banks to invest more in technology and digital transformation.

Local special circumstances: The regulatory environment in the United Kingdom plays a significant role in shaping the Traditional Commercial Banking market. With stringent regulations aimed at ensuring financial stability and consumer protection, banks in the UK must comply with various rules and standards set by regulatory authorities. This regulatory framework influences the strategies and operations of traditional banks in the country, impacting their growth and profitability.

Underlying macroeconomic factors: Macroeconomic factors such as interest rates, economic growth, and inflation also influence the Traditional Commercial Banking market in the United Kingdom. Fluctuations in interest rates set by the Bank of England affect banks' lending and deposit rates, impacting their profitability and competitiveness. Moreover, the overall economic environment in the UK, including GDP growth and inflation rates, can affect the demand for banking services and the credit quality of borrowers, shaping the performance of traditional banks 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.