Traditional Banks - Romania

Romania

In 2024, the projected Net Interest Income in the Traditional Banks market market in Romania is expected to reach US$21.58bn.
Traditional Commercial Banking dominates the market in Romania, with a projected market volume of US$11.69bn in 2024.
Looking ahead, the Net Interest Income is expected to show an annual growth rate (CAGR 2024-2029) of 2.44%, resulting in a market volume of US$24.34bn by 2029.
In global comparison, in China is expected to generate the highest Net Interest Income, reaching US$3,869.0bn in 2024.
Traditional banks in Romania are facing increased competition from digital banking platforms, prompting them to innovate and improve their services to stay relevant in the market.

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

Amidst the evolving landscape of the banking sector in Romania, traditional banks are experiencing notable shifts in customer preferences, market trends, and local special circumstances.

Customer preferences: Romanian customers are increasingly seeking personalized and convenient banking services, prompting traditional banks to enhance their digital offerings and customer experience. The demand for seamless online banking solutions and mobile applications is on the rise, driving traditional banks to invest in technology to meet customer expectations.

Trends in the market: In Romania, traditional banks are witnessing a gradual transition towards digitalization and innovation to stay competitive in the market. The introduction of online account opening, digital payments, and AI-powered customer service is reshaping the banking experience for customers. Moreover, traditional banks are exploring partnerships with fintech companies to leverage their expertise and expand service offerings.

Local special circumstances: Romania's banking sector is influenced by unique local circumstances, such as regulatory changes, economic stability, and competition from non-traditional financial players. The regulatory environment plays a crucial role in shaping the operations of traditional banks, while economic factors impact customer behavior and investment decisions. Additionally, the presence of non-traditional financial institutions poses a challenge for traditional banks to differentiate themselves and maintain market share.

Underlying macroeconomic factors: The development of the traditional banks market in Romania is also influenced by macroeconomic factors such as GDP growth, interest rates, inflation, and foreign direct investment. Economic stability and growth prospects impact the demand for banking products and services, while interest rates and inflation rates influence borrowing and saving decisions of customers. Moreover, foreign direct investment plays a significant role in the overall performance of the banking sector, reflecting investor confidence and market potential.

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.