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India’s Top Banks Suffer While Challenger Brands Surge Ahead- By Brand Finance


The Brand Finance Banking 500, is an annual study conducted by leading brand valuation agency Brand Finance and published in the February edition of ‘The Banker’ magazine. The world’s biggest banks are ranked by their brand value, with the results reflecting industry trends and indicating future developments.

India’s top banks have suffered significant brand value losses this year with State Bank of India bearing the brunt. India’s most valuable banking brand has seen nearly US$2 billion dollars cut from its brand value. A brand value that last year was close to US$6 billion now stands at just over US$4 billion, meaning that State Bank of India has now dropped out of the global top 50. Reduced revenues, a more pessimistic outlook for the Indian economy and the weakening rupee are largely to blame.

ICICI and HDFC Bank, India’s next two most valuable bank brands are also down. ICICI has dropping out of the global top 100 as a protracted and painful recovery from huge revue falls in 2012 continues. Punjabi National Bank has lost nearly 22% of its brand value, which now stands at US$511 million. The collective losses means the total brand value of India’s banks is down 13% or a net US$1.83 billion dollars. As a result India has fallen behind Sweden and South Korea and is now 17th in terms of total national bank brand value.

Despite this, there is cause for celebration, with many of India’s smaller banks forging ahead with brand value growth approaching 10, 20 or even 50 per cent. Union Bank is the star performer. It has grown its brand value by 49% in the last year to reach a total of US$321 million, entering India’s top 10 in the process. It has overtaken IDBI, which despite dropping out of the top 10 has itself had a successful year, adding US$52 million in brand value. In fact Union Bank, IDBI, Central Bank of India, Allahabad Bank, Indian Overseas Bank, Syndicate Bank and Oriental Bank of Commerce have all not only improved their brand value, but have also improved both their global ranking and their brand rating. The brand rating is a benchmark of the strength, risk and potential of a brand, suggesting that in spite of the pessimism surrounding India’s short term economic outlook, many brands are poised for further improvements next year.

India’s Most Valuable Banking Brands
 
Global Rank 2014 Global Rank 2013 Brand Brand Value 2014 (USD m) Brand Rating 2014 BV Change (%) BV Change (USD m) Brand Value 2013 (USD m) Brand Rating 2013
54 38 State Bank of India 4,063 AA+ -32.22% -1932 5,995 AA+
107 99 ICICI Bank 1,698 AA+ -6.74% -123 1,820 AA
133 126 HDFC Bank 1,223 AA -0.40% -5 1,228 AA
178 175 Axis Bank 766 AA 3.28% 24 742 AA
208 206 Bank Of Baroda 606 AA- 5.53% 32 574 A+
227 189 Punjab National Bank 511 A+ -21.60% -141 652 A+
245 242 Kotak Mahindra Bank 481 AA+ 8.10% 36 445 AA
275 258 Bank of India 397 AA 3.32% 13 384 A+
301 292 Canara Bank 339 AA+ 2.82% 9 330 AA-
312 392 Union Bank of India 321 A+ 48.94% 105 215 A
351 387 IDBI Bank 270 AA 23.64% 52 218 A+
396 448 Central Bank of India 212 AA 19.34% 34 178 A
403 451 Allahabad Bank 207 A+ 19.47% 34 173 A
408 439 Indian Overseas Bank 202 AA- 11.26% 20 181 A
451 453 Syndicate Bank 174 A+ 0.67% 1 173 A
478 486 Oriental Bank of Commerce 160 A+ 7.32% 11 149 A
499 493 Shriram 146 A+ 0.13% 0 146 A+


Global Results

Wells Fargo has held its position as the world’s most valuable banking brand, with a total brand value of over US$30 billion. Western brands in general have shown promising improvements. HSBC’s brand value has grown by $US 4 billion, while UBS’ is up US$3.35 billion, a 46% increase. Meanwhile the total for Greece is up over 100% as successful austerity measures have begun to rapidly transform the country’s economic outlook.

Like India, Brazil and Russia have also experienced sudden slowdowns in their national bank brand value growth. Their national brand value totals are down 6%, 13% and 23% respectively reversing a trend of rapid bank brand value growth for all BRIC countries over the last few years. China, however, continues to grow strongly. Its banks have added a total of nearly US$19 billion and there are now 3 Chinese bank brands in the global top ten.

The World’s Most Valuable Banking Brands (Top 10)
 
Rank 2014 Rank 2013 Brand Domicile Brand Value 2014 (USDm) Brand Rating 2014 BV Change (%) BV Change (USDm) Brand Value 2013 (USDm) Brand Rating 2013
1 1 Wells Fargo US 30,242 AAA- 16.12% 4198 26,044 AA+
2 3 HSBC UK 26,870 AAA 17.52% 4005 22,865 AAA-
3 4 Bank of America US 26,683 AA+ 19.13% 4285 22,397 AA+
4 5 Citi US 24,518 AA+ 13.11% 2841 21,677 AA+
5 2 Chase US 23,157 AA+ -1.07% -251 23,408 AAA-
6 7 ICBC China 22,803 AA+ 15.05% 2984 19,820 AA+
7 9 BNP Paribas France 20,206 AAA- 8.79% 1633 18,573 AAA-
8 6 Santander Spain 20,021 AAA- -0.49% -98 20,119 AAA-
9 10 China Construction Bank China 18,954 AA+ 11.83% 2005 16,949 AA
10 11 Agricultural Bank Of China China 17,783 AA+ 11.37% 1816 15,967 AA-
 
 
Total Bank Brand Value by Country
 
Country Total Brand Value 2014 (USD millions) Total Brand Value 2013 (USD millions) Change (%) Change (USD millions)
UNITED STATES 193,633 174,438 11% 19,195
CHINA 113,219 94,248 20% 18,971
UNITED KINGDOM 76,348 64,810 18% 11,538
JAPAN 55,833 34,901 60% 20,932
FRANCE 48,048 42,299 14% 5,748
CANADA 47,249 43,083 10% 4,166
SPAIN 36,096 33,713 7% 2,383
BRAZIL 33,483 43,236 -23% -9,753
GERMANY 32,425 28,558 14% 3,867
AUSTRALIA 29,812 28,014 6% 1,799
SWITZERLAND 25,686 21,583 19% 4,103
ITALY 19,777 18,839 5% 938
NETHERLANDS 19,100 17,288 10% 1,812
RUSSIA 18,010 19,083 -6% -1,072
SOUTH KOREA 15,717 13,169 19% 2,548
SWEDEN 14,962 13,343 12% 1,619
INDIA 11,773 13,602 -13% -1,828
TURKEY 9,920 9,614 3% 306
SINGAPORE 8,529 7,311 17% 1,218
MALAYSIA 7,114 6,388 11% 726
           

Brands are probably the most valuable assets that companies own, driving demand and building relationships with customers and partners. However, without firm financial data their importance can be overlooked or misunderstood, particularly in the banking sector. The Banker / Brand Finance Banking 500 provides clarity to analysts, journalists, investors and boards by providing a list of the world’s most valuable banking brands, ranked by their brand value.

World leading brand valuation agency Brand Finance calculates the value by determining the royalties a corporation would have to pay to license its brand if it did not own it, known as the ‘royalty relief’ method. Brand Finance was one of the first companies in the world to be accredited to provide ISO 10668 compliant brand valuations. The ISO 10668 global standard provides a consistent, reliable approach to brand valuation that emphasises transparency and objectivity. Valuers must take all relevant financial, behavioural and legal information into consideration. Brand Finance would like to thank its partners, The Banker, Novagraaf, Havas, BAV Consulting, Alexa, Bloomberg, Meltwater, VI360 and CSR Hub for the information they have provided to make our valuations of the world’s top brands ISO 10668 compliant.

As well as a brand value, each of the 500 brands in the table is accorded a brand rating; a benchmark of the strength, risk and potential of a brand relative to its competitors, similar to a credit rating. The study has been published annually in the February edition of the Financial Times’ ‘The Banker’ magazine since 2006. A detailed methodology of how the brand values are calculated can be found on www.brandfinance.com and the results from last year’s study www.brandfinance.com.

About Brand Finance

Brand Finance is the world’s leading brand valuation consultancy, with offices in over 15 countries. We provide clarity to marketers, brand owners and investors by quantifying the financial value of brands. Drawing on expertise in strategy, branding, market research, visual identity, finance, tax and intellectual property, Brand Finance helps clients make the right decisions to maximise brand and business value.

About The Banker 

The Banker is the world's premier banking and finance resource, providing global financial intelligence since 1926, published by the Financial Times ltd.

The Banker combines in-depth regional and country coverage reporting on capital markets, structured finance, risk management, working capital management and securities services, environmental finance, trade and project finance, trading, technology and management and governance issues. The Banker/Brand Finance Banking 500 is published in The Banker February edition, to find out more email thebanker@ft.com.

Brian Caplen has been a financial and business journalist for more than 25 years He has worked in Hong Kong and the Middle East and reported from all over the world. He joined The Banker in 2000 and became editor in 2003. 

For more information, please visit www.brandfinance.com

The statements or opinions or product features are those of the company and are not necessarily agreed or authorised or endorsed by IndiaCore.com.


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