'...the number of companies in the country is expected to increase rapidly.' - Why is that important for a retail bank?

Question

Where a retail bank is a division of a bank for personal banking, not for businesses?

Many thanks,

Estelle

Answer 1

Think more jobs I believe.

Answer 2

More companies - more salaries - more deposits/credit eligible clients. If there is a considerable growth of number of companies that means economy is doing good, there are investors/commercial loans are more affordable, internal market will grow correspondingly.

Answer 3

More individual transactions which is where they can earn more service charges and fees. More companies doesn't necessarily mean more jobs or a growing economy with more personal deposits but it does mean that the bank has more clients who they can give loans to.

Answer 4

The answer lies in the Key Insight section just below the bullet you quoted in your question:

Key Insights

The local market is promising because there are positive macroeconomic trends (Poverty is decreasing because employment is increasing. This increases demand for bank services.)

The number of companies is increasing rapidly. (Our client could be these companies’ bank and offer them products such as B2B loans.)

Regarding the second bullet: I could imagine that in markets where a large share of the economy consists of small one-person or one-family enterprises, the difference between retail and corporate banking is fluid.

Answer 5

So our client can give out B2B loans to new businesses.

Answer 6

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Answer 8

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