China’s Bank Brands More Valuable than America’s

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di Finanza Operativa 2 Febbraio 2017 | 19:00

For the very first time, the combined brand value of China’s lenders has surpassed that of the United States. China’s bank brands account for 24% (US$258 billion) of the total brand value of the Brand Finance Banking 500, while the US accounts for 23%. Every year, leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. The results of this analysis are then ranked, with the world’s 500 most valuable banking brands featured in the Brand Finance Banking 500. View the list of the world’s 500 most valuable banking brands here

Brand Finance’s research shows that China’s consumers demonstrate a lack of cynicism, an affinity for brands and economic patriotism that gives their banks a solid foundation that (post 2008) western banks cannot hope to match. Driving more recent growth has been accelerating Chinese foreign M&A activity. This hit a record high in 2016, providing opportunities for the country’s banks beyond its growing domestic market. Brand Finance’s CEO David Haigh states, “Chinese banks are being carried along in the slipstream of its industrial giants as they grow and expand into international markets. Facilitating international deals boosts revenues, but more importantly, enables the banks to build their reputations with potential clients across the world.”

The combination of domestic loyalty and rapidly improving international recognition has resulted in formidable brand equity and brand value results for China’s banks. Already the world’s biggest bank by assets, ICBC’s brand value has grown 32% year on year to a total of US$47.8 billion. China Construction Bank and Bank of China are also growing strongly (by 17% and 13% respectively). The fastest growing brand this year is also Chinese. Harbin Bank’s brand has trebled in value over the course of 2016 to US$811 million.

The success of the Chinese banks and ICBC in particular comes at the expense of Wells Fargo, which has lost its position as the world’s most valuable banking brand. Wells Fargo has also been the architect of its own misfortune. Its fake accounts scandal has seen its reputation take a hit, with downgraded revenue forecasts contributing to a 6% brand value fall to US$41.6 billion.

The situation for Europe’s banks is worse still. The most valuable bank brands from the UK, France, Germany and Italy (HSBC, BNP Paribas, Deutsche Bank and Intesa Sanpaolo) have all declined in brand value. Deutsche has recently been hit with a US$7.2 billion bill to settle an investigation into its mortgage backed securities. 2016 also saw a 97% drop in profits and an individual bonus freeze for all VPs and MDs. Deutsche’s torrid year was reflected in its brand value, which is down 41% to US$4.9 billion.

HSBC has declined by a less severe 5% to US$22.9 billion as it goes through a period of consolidation. At the domestic level, over a quarter of its UK branches have been closed in the last two years while internationally, HSBC’s Brazilian business was sold to Bradesco. HSBC’s marketing communications have shifted to reflect its more geographically concentrated approach. The ‘World’s Local Bank’ message has been replaced with campaigns that now focus more on HSBC’s role in facilitating personal and business ambitions.

Canada’s banks are an exception to the general western trend. RBC leads the way with brand value growth of 28% to US$12.7 billion, but TD, Scotiabank, Bank of Montreal, CIBC and Desjardins have all posted double digit brand value growth.

Qatar National Bank is the Middle East and Africa’s most valuable bank brand. Net profit in 2016 was US$3.4 billion, up 10% from the previous year while total assets reached US$198 up by 34% from December 2015. QNB acquired Turkey’s fifth largest lender, Finansbank, the subsequent rebrand contributing to overall brand value growth of 56% to US$3.82 billion.

Itaú is the most valuable banking brand in Latin America. The Brazilian Real appreciated approximately 25% in 2016 and the economy is rebounding after several difficult years. Itaú is clearly benefitting, with a brand value of US$6.9 billion, almost double that of last year.

Sberbank, ranked 24th globally, is Russia’s most valuable banking brand. Its brand value is US$9.1 billion after 33% growth this year. David Haigh concludes, “Sberbank has weathered the struggling Russian economy thanks to carefully managed risk but more importantly its ambitious, technology-led innovation.”

 

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