Banking - Cyprus

Cyprus

Cyprus is projected to witness a substantial growth in its Banking market, with the Net Interest Income expected to reach US$1.51bn in 2024.
Among the market players, Traditional Banks are set to dominate the sector, with a projected market volume of US$1.10bn in 2024.
Over the period of 2024-2028, the Net Interest Income is anticipated to exhibit a steady annual growth rate (CAGR 2024-2028) of -22.31%, resulting in a market volume of US$0.55bn by 2028.
Comparatively, in China is expected to generate the highest Net Interest Income globally, amounting to US$5,659.0bn in 2024.
Cyprus' banking sector is experiencing a surge in digital banking services, with increased adoption of 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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Analyst Opinion

The Banking market in Cyprus has shown resilience and adaptability in recent years.

Customer preferences: Customers in Cyprus are increasingly demanding more digital banking services, leading to a rise in online and mobile banking options. This shift in preference is in line with global trends towards convenience, efficiency, and 24/7 accessibility in banking services.

Trends in the market: One notable trend in the Cypriot Banking market is the consolidation of smaller banks. This trend is driven by the need for cost efficiency and economies of scale in the face of increasing regulatory requirements and competition. As a result, larger banks are gaining more market share and influence in Cyprus.

Local special circumstances: Cyprus's unique position as a financial hub in the Eastern Mediterranean region has attracted foreign banks to establish a presence in the country. This has led to a diverse banking sector with both local and international players competing for market share. Additionally, the country's strategic location has also made it a gateway for investment and trade between Europe, the Middle East, and North Africa.

Underlying macroeconomic factors: The recovery of the Cypriot economy following the financial crisis has had a positive impact on the banking sector. With improving economic conditions, including GDP growth and declining unemployment rates, there is a growing demand for banking services such as loans, mortgages, and investment products. This economic stability has provided a conducive environment for the growth and development of the Banking market in Cyprus.

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.