In Middle East, bank brands’ values slide
Annual research by Brand Finance – the Banking 500 – includes 25 Middle East bank brands. The top regional performer is QNB at 120, down from 114 last year with a brand value of $1.31 billion, up from $1.26 billion. However, all of the regional banks represented in the listing have seen their placings slip back from 2012.
Only five of the Middle East banks actually show an absolute rise in their brand value for 2013: QNB, First Gulf Bank, Kuwait Finance House, Burgan Bank and Union National Bank. The listing includes nine banks from the UAE, four each from Qatar and Saudi Arabia, three from Kuwait, two from Bahrain and one each from Jordan, Morocco and Oman. The most valuable bank brand in the UAE is National Bank of Abu Dhabi at 146 (2012:118) with a brand value of $990 million (2012:$1.21 billion). Collectively, the Middle East banks represented in the listing have a total brand valuation of $10.53 billion for 2013, down more than six per cent on the previous year.
According to Brand Finance’s analysis, US bank Wells Fargo is the world’s most valuable bank brand with a brand value of $26 billion and there has been a 15 per cent increase overall in total bank brand values from $746.8 billion in 2012 to $860.7 billion in 2013, in contrast to over $100 billion lost the previous year Despite murmurings of reduced growth Chinese banks have again performed well, with a total brand value increase of 335 per cent. UK banks, including 2012’s most valuable bank brand HSBC, have done poorly - the UK saw the total value of its bank brands fall (by two per cent).
Brand Finance said Wells Fargo CEO John Stumpf has spearheaded an impressive recovery from 2012, leading a field of retail-focussed banks that have outperformed competitors in other sectors. Total retail banking revenues for the top 500 are up 24 per cent with brand values increasing 21 per cent. Meanwhile investment banking revenues are down seven per cent and brand values down 14 per cent. US banks fared well relative to their European counterparts. Most have disposed of bad assets and with the domestic economy and property market starting to recover, earnings projections, a key brand value driver, have improved. At the same time they have help boost employment, with employee numbers up 10 per cent. US banks now occupy four of the top five places and five more places in the table as a whole, with a total of 93.
Russian banks have performed the best with a 453 per cent uplift since 2008, followed by Indonesia (443 per cent), the Philippines (412 per cent), Colombia (377 per cent) and China (335 per cent).
Each brand is accorded a brand rating: a benchmarking study of the strength, risk and future potential of a brand relative to its competitor set as well as a brand value: a summary measure of the financial strength of the brand. The report analyses the market values of brands as intangible financial assets that drive demand and build business relationships. Brand Finance uses the Royalty Relief method to analyse the royalties that a corporation would have to pay to license its brand if it did not own it, thus establishing the cost from which a bank is relieved through owning its brand.
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