Banks around the world are eagerly eyeing opportunities in the emerging markets, says a survey of banking executives by KPMG International.
The survey titled, Bruised but not broken: the global banking growth agenda, finds many banks based in relatively mature and saturated Western markets are increasingly looking at the emerging markets for their growth plans.
But while emerging market institutions are likely to see continued strong growth in domestic markets, Western banks will find success in these markets to be a slow and cumbersome process.
Survey participants from the emerging market prioritised domestic growth over international expansion. “Citing strong opportunities for remaining in their domestic markets and the relative high cost of pursuing foreign growth, most emerging market banks suggested their international expansion plans were limited to either satisfying the international requirements of their domestic corporate customers or servicing their nationals living abroad,” went a statement from KPMG.
Interviewees cited China, with India as a second favourite. But in both cases, respondents also noted strong concerns about the potential for foreign banks to penetrate the market and build scale. Indonesia was also frequently mentioned as a market with significant banking potential, though far fewer interviewees were actively pursuing opportunities there than in China or India.
Russia is seen as having great potential but considered by many a difficult market to succeed, largely due to the significant dominance of the two largest state-owned banks. However, with only one in four Russians having a bank account, Russia seems to have considerable retail potential.
