Banking - GCC

The Banking market in GCC is expected to witness a significant growth in Net Interest Income, reaching a projected value of US$86.85bn in 2024.
Traditional Banks are set to dominate this market segment, with a projected market volume of US$86.01bn in the same year.
Furthermore, the Net Interest Income is anticipated to showcase a steady growth rate, with a Compound Annual Growth Rate (CAGR) of 5.28% between 2024 and 2028.
This growth trajectory is expected to result in a market volume of US$106.70bn by 2028.
In a global perspective, it is worth noting that in China will generate the highest Net Interest Income.
In 2024, in China is projected to generate US$5,659.0bn in Net Interest Income.
This comparison highlights the significant contribution of the Chinese Banking market sector to the global market.
In the GCC, the banking sector is experiencing a surge in digital banking services, with banks in Saudi Arabia leading the way in adopting innovative technologies.

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 GCC is experiencing significant growth and development in recent years.

Customer preferences: Customers in the GCC region are increasingly demanding digital banking services, with a focus on convenience, efficiency, and security. Mobile banking apps and online platforms have become popular among tech-savvy consumers, leading banks to invest more in digital infrastructure to meet these preferences.

Trends in the market: One notable trend in the GCC Banking market is the increasing adoption of Islamic banking products and services. Sharia-compliant banking has gained traction in the region, with many customers opting for Islamic financial solutions. Additionally, there is a growing emphasis on sustainable and socially responsible banking practices, aligning with global trends towards ESG investing.

Local special circumstances: The GCC region is characterized by a young and tech-savvy population, driving the demand for innovative banking solutions. Moreover, the presence of a large expatriate community in countries like the UAE and Qatar has influenced the banking landscape, leading to diverse product offerings catering to the needs of both locals and foreigners.

Underlying macroeconomic factors: The economic diversification efforts in the GCC countries have contributed to the growth of the Banking market. As these nations reduce their dependence on oil revenues and focus on developing non-oil sectors, the demand for banking services to support businesses and investments has increased. Additionally, favorable government policies and regulatory frameworks have created a conducive environment for the banking sector to thrive 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.