Market Insights Financial Banking Traditional Banks

Traditional Commercial Banking - Hong Kong

Hong Kong

In Hong Kong, the Traditional Commercial Banking market market is expected to witness a significant growth in Net Interest Income, reaching US$15.10bn in 2024.
This projection anticipates a steady annual growth rate (CAGR 2024-2028) of -2.31%, leading to a market volume of US$13.75bn by 2028.
When compared globally, it is noteworthy that in China is anticipated to generate the highest Net Interest Income, with a projected value of US$1,749.0bn in 2024.
Hong Kong's traditional commercial banking market remains robust, driven by its status as a global financial hub and strong regulatory framework.

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 Hong Kong has been experiencing significant developments and trends in recent years.

Customer preferences: Customers in Hong Kong are increasingly demanding more personalized and convenient banking services. They prefer digital banking solutions that offer ease of access and seamless transactions. Moreover, there is a growing preference for sustainable and socially responsible banking practices among customers in the region.

Trends in the market: One of the key trends in the Traditional Commercial Banking market in Hong Kong is the rapid adoption of financial technology (fintech) solutions. Traditional banks are increasingly partnering with fintech companies to enhance their service offerings and improve operational efficiency. Another notable trend is the emphasis on wealth management services, catering to the affluent population in Hong Kong.

Local special circumstances: Hong Kong's status as an international financial hub plays a significant role in shaping the Traditional Commercial Banking market in the region. The presence of a large number of multinational corporations and high-net-worth individuals has led to a competitive banking landscape. Additionally, the regulatory environment in Hong Kong is conducive to innovation and technological advancements in the banking sector.

Underlying macroeconomic factors: The economic stability and growth of Hong Kong contribute to the development of the Traditional Commercial Banking market. Factors such as low unemployment rates, robust GDP growth, and a strong regulatory framework create a favorable environment for banks to expand their operations and introduce new products and services. Additionally, Hong Kong's strategic location in Asia and its strong trade relationships further support the growth of the banking sector 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.