Traditional Banks - Germany

Germany

In Germany, the Traditional Banks market market is expected to witness a significant growth in Net Interest Income, reaching a projected value of US$147.10bn by the year 2024.
Among the various segments, Traditional Commercial Banking dominates the market with a projected market volume of US$101.10bn in the same year.
Looking ahead, the Net Interest Income is anticipated to exhibit a steady annual growth rate (CAGR 2024-2029) of 4.68%, resulting in a market volume of US$184.90bn by 2029.
It is noteworthy to mention that, in a global comparison, China is expected to generate the highest Net Interest Income, with a staggering amount of US$3,869.0bn in 2024.
Germany continues to see a shift towards digital banking, with traditional banks investing heavily in online and mobile banking services to keep up with customer demands.

Key regions: Germany, United Kingdom, France, Japan, China

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 Germany has been experiencing significant developments in recent years.

Customer preferences: Customers in Germany are increasingly valuing personalized services and digital banking solutions. They seek convenience, efficiency, and a seamless omnichannel banking experience. Traditional banks are adapting to these preferences by investing in technology to enhance their online and mobile banking capabilities.

Trends in the market: One notable trend in the Traditional Banks market in Germany is the consolidation and restructuring of banks to improve cost efficiency and competitiveness. Additionally, there is a growing trend towards sustainable banking practices and ethical investments, driven by increasing environmental and social awareness among consumers.

Local special circumstances: Germany's strong regulatory environment and emphasis on financial stability have influenced the Traditional Banks market. The presence of established banking players with a long history in the country has created a competitive landscape where innovation and customer-centric strategies are crucial for success.

Underlying macroeconomic factors: The low interest rate environment in Germany has put pressure on traditional banks' profitability, leading them to explore new revenue streams and cost-cutting measures. Economic uncertainties and changing consumer behaviors, especially in the aftermath of global events, are also shaping the direction of the Traditional Banks market in the country.

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.