Traditional Banks - China

China

In 2024, it is projected that the Net Interest Income in the Traditional Banks market market in China will reach a staggering US$4.69tn.
Traditional Retail Banking is expected to dominate this market with a projected market volume of US$2.94tn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit an annual growth rate (CAGR 2024-2028) of 6.44%, which will result in a market volume of US$6.02tn by 2028.
When examining the global scenario, it is worth noting that in China will generate the highest Net Interest Income, with an estimated amount of US$4.69tn in 2024.
China's traditional banks are rapidly adapting to the digital landscape to meet the changing needs of the country's tech-savvy consumers.

Key regions: Singapore, United Kingdom, Germany, Brazil, United States

Definition:

The Traditional Retail and Commercial Banks 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. 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.
The traditional banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. These banks have a long history of serving customers and have established relationships and a deep understanding of the financial needs of their communities. They offer a wide range of services and are able to provide personalized advice and support to their customers.
In this market, banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. However, they also face challenges, such as increased competition and changing customer preferences, which are driving the need for continuous improvement and adaptation.
Overall, the traditional retail and commercial banking market provides a wide range of financial services to both individuals and businesses through established, trusted channels and continues to play a vital role in the financial landscape.

Structure:

The market consists of two segments:
- The Traditional Retail Banks market refers to financial services provided to individual consumers (e.g., personal loans, savings and checking accounts, credit cards, mortgages).
- The Traditional Commercial Banks market refers to financial services provided to businesses, including small and large enterprises (loans, lines of credit, other financial products specifically designed for businesses).

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 Banks market in China is experiencing a shift in customer preferences, trends, and local special circumstances that are shaping its development.

Customer preferences: Chinese customers are increasingly seeking personalized and convenient banking services. With the rise of digitalization and technology, there is a growing demand for online and mobile banking solutions that offer efficiency and ease of access. Customers are also looking for traditional banks to provide a wide range of financial products and services to meet their diverse needs.

Trends in the market: One prominent trend in the Traditional Banks market in China is the expansion of services to rural areas. As the government pushes for financial inclusion and economic development in rural regions, traditional banks are focusing on establishing branches and offering tailored products to cater to the unique needs of rural customers. Additionally, there is a growing trend towards sustainable banking practices and green financing as environmental awareness increases among consumers and businesses.

Local special circumstances: China's regulatory environment plays a significant role in shaping the Traditional Banks market. The government's policies and regulations influence the operations and growth strategies of traditional banks in the country. For instance, strict regulations on interest rates and capital requirements impact the profitability and competitiveness of banks. Moreover, the presence of state-owned banks alongside private and foreign banks creates a unique competitive landscape in China's banking sector.

Underlying macroeconomic factors: The macroeconomic landscape in China, including factors such as economic growth, inflation rates, and government policies, directly impact the Traditional Banks market. As the Chinese economy continues to grow, traditional banks are presented with opportunities to expand their customer base and offer innovative financial solutions. However, fluctuations in interest rates and changes in government regulations can pose challenges for banks in terms of profitability and risk management. Adapting to these macroeconomic factors is crucial for traditional banks to thrive in the dynamic market environment of China.

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.