Banking - Eastern Europe

Eastern Europe

In Eastern Europe, the projected Net Interest Income in the Banking market is expected to reach US$165.50bn in 2024.
The market is predominantly dominated by Traditional Banks, which are projected to have a market volume of US$134.30bn in the same year.
Looking ahead, the Net Interest Income is anticipated to experience an annual growth rate of 3.85%, as per the CAGR projection for the period 2024-2028.
This growth is expected to result in a market volume of US$192.50bn by 2028.
When compared globally, it is worth noting that in China is anticipated to generate the highest Net Interest Income in 2024, with a projected amount of US$5,659.0bn.
In Eastern Europe, the banking sector in Poland is experiencing a surge in digital banking services, with a growing number of customers opting for online and mobile banking.

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

In recent years, the Banking market in Eastern Europe has been witnessing significant growth and development.

Customer preferences: Customers in Eastern Europe are increasingly looking for digital banking solutions that offer convenience and efficiency. The preference for online banking services has been on the rise, driven by the ease of access to account information, ability to make transactions remotely, and the availability of various financial management tools.

Trends in the market: One of the key trends in the Banking market in Eastern Europe is the increasing competition among traditional banks and fintech companies. Fintech firms are disrupting the market by offering innovative solutions such as mobile payment platforms, peer-to-peer lending, and robo-advisors. This trend is pushing traditional banks to enhance their digital offerings and improve customer experience to remain competitive.

Local special circumstances: Eastern Europe has a diverse banking landscape with varying levels of market maturity across different countries. While some countries have well-established banking sectors with a strong regulatory framework, others are still in the process of modernizing their financial systems. This diversity creates opportunities for both local and international players to tap into different market segments and cater to the specific needs of customers in each country.

Underlying macroeconomic factors: The growth of the Banking market in Eastern Europe is also influenced by macroeconomic factors such as GDP growth, inflation rates, and interest rates. Stable economic conditions and increasing disposable income levels in some countries have led to higher demand for banking products and services. Additionally, regulatory reforms aimed at improving transparency and efficiency in the financial sector have contributed to the overall development of the banking market in the region.

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.