More often the bad guys, banks are regaining loyalty

Global banks are registering further recovery after the financial crisis, with the brand valuations of the top institutions approaching US$1 trillion in value.

Brand Finance, a UK consultancy that tracks the value of brand names globally, says the world’s top 500 bank brands are now worth $988.3 billion – a 5.7 per cent increase on last year.

“In terms of brand value the banking industry, on the whole, seems to have recovered from the crisis,” said Alex Corringham, valuation analyst at Brand Finance.

Wells Fargo, from the US, is the world’s leading banking brand, with a valuation of $44.17bn, a 26 per cent increase on last year, according to the Brand Finance ranking.

“Banks in Europe haven’t performed as well as Chinese or American banks, which have driven up the total value of the banks in the Banking 500 study,” said Mr Corringham.

In the Middle East, the Qatar National Bank (QNB) ranks as the top-valued banking brand at $2.45bn, despite a 6 per cent decline in value on last year.

Of all the regional banks QNB is one with the best potential to go global, said Mr Corringham.

“It’s one of the only Middle Eastern brands that have a clean, elegant visual identity that could resonate well in international markets,” he said. “QNB is probably the only one that has the traction to push for globalisation.”

Vinoth Jayakumar, an associate director at Brand Finance, said he expects Middle Eastern banks to take their brand valuations more seriously.

“A lot of them are now starting to see brand as more of a profit centre, and not just a cost,” he said.

But low oil prices have hit banks’ brand performances, he added, with fewer project finance deals from the energy sector.

“That’s one direct hit on the banks, particularly within the commercial banking sector,” he added.

Most of the biggest-growing banks by brand valuation are Chinese, Mr Jayakumar said.

“Customers of Chinese banks have a very high perception of them; the banks have a very high likeability factor and are scoring very highly on loyalty,” he said.

China’s economy as a whole is “shifting from being a white-label goods manufacturer to being more of a branded economy,” Mr Jayakumar added.

“Chinese banks are moving beyond provision of basic banking services and are investing in their brands. There is an increased focus on creating brand equity and building global brands”

The Brand Finance calculations looks at brand strength – including factors like advertising spending, marketing investment and brand equity – and the financial performance of the banks, primarily forecast revenues.

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