Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - China

China

In China, the Traditional Commercial Banking market market is expected to witness a significant increase in its Net Interest Income.
By 2024, it is projected to reach a staggering US$1.75tn.
Furthermore, this segment is anticipated to display a compound annual growth rate (CAGR 2024-2028) of 7.19%, leading to a market volume of US$2.31tn by 2028.
It is worth noting that in China will dominate the global market in terms of Net Interest Income, with an estimated value of US$1.75tn in 2024.
In China's Traditional Commercial Banking market, there is a growing trend towards digitalization and the adoption of innovative financial technologies.

Key regions: Brazil, China, South Korea, Japan, India

Definition:

Commercial banking refers to the financial services sector that provides a range of financial products and services to businesses, including small and large enterprises. Commercial banks offer services such as loans, lines of credit, and other financial products specifically designed for businesses. These services are critical to supporting the growth and development of businesses and the broader economy.
Commercial banks play a key role in the financial landscape by providing businesses with the funding they need to invest in new projects, hire employees, and expand their operations. They also offer a range of risk management services, such as trade financing and hedging solutions, to help businesses manage their financial risks.
The commercial banking market is highly competitive, with large global players as well as regional and local banks competing for business. Banks in this market are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Changes in regulations and the growing trend towards digitalization are also shaping the commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.
Overall, commercial banking provides a vital range of financial services to businesses and is critical to supporting the growth and development of the broader economy.

Structure:

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 Commercial Banking market in China has been experiencing significant growth and transformation in recent years.

Customer preferences: Customers in China are increasingly seeking convenient and efficient banking services, leading to a rise in digital banking solutions. The convenience of online and mobile banking platforms is driving customer preferences towards digital channels for their banking needs. Additionally, Chinese customers value personalized services and are more inclined towards banks that offer tailored financial products to meet their specific needs.

Trends in the market: One prominent trend in the Traditional Commercial Banking market in China is the increasing adoption of financial technology (Fintech) solutions. Fintech companies are disrupting the traditional banking sector by offering innovative services such as peer-to-peer lending, mobile payments, and robo-advisors. This trend is reshaping the competitive landscape of the banking industry in China, with traditional banks facing pressure to innovate and adapt to changing customer demands.

Local special circumstances: China's unique regulatory environment and government policies play a crucial role in shaping the Traditional Commercial Banking market. The Chinese government has been promoting financial inclusion and innovation through initiatives such as the establishment of online-only banks and the development of a central bank digital currency. These special circumstances create both opportunities and challenges for traditional banks in China as they navigate regulatory requirements while striving to remain competitive in a rapidly evolving market.

Underlying macroeconomic factors: The continued economic growth and urbanization in China are fueling the demand for banking services. As more individuals and businesses enter the formal banking system, traditional banks are presented with opportunities to expand their customer base and increase their market share. Moreover, China's focus on sustainable development and green finance is influencing the banking sector, with banks increasingly incorporating environmental, social, and governance (ESG) criteria into their lending and investment decisions. These macroeconomic factors are shaping the future direction of the Traditional Commercial Banking market in 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.