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cover sTory | top 500 banking brands

INTRODUCTION

The brand value of US banks has reached a new high, while emerging economies such as Brazil and China also stand out in this years Top 500 Banking Brands ranking. Brian Caplen reports.

ells Fargo replaces HsbC as the worlds most valuable brand in this years top 500 banking brands ranking. Wells Fargos achievement demonstrates the improved standing of Us banks as they recover from the nancial crisis and forge ahead. brand valuations have performed well across the board with total brand value rising 15% from $746.8bn in 2012 to $860.7bn this year, a new high and a big difference from last year when the total fell from $855bn, the 2011 total. Chinese banks also improved their collective result, as did all the top 10 countries with one notable exception. the Uk saw its overall valuation drop as a result of brand value losses by leading players such as HsbC and standard Chartered. Wells Fargo gained $2.8bn to give it a brand value of $26bn and so recovering some, but not all, of last years $5.7bn loss. and while 2012s drop in value did not dislodge Wells Fargo from the second spot, this years increase was enough to give it the top position. Us banks hold four of the top ve places in the ranking up from three last year and overall they account

for 93 brands ve more than last year with a total value of $230.6bn. this is an increase of $24.6bn on 2012s gure and keeps them well ahead of their nearest rival China, whose 23 brands increased in value by $16bn. in fact, the total brand value of Us banks is larger than the next three biggest countries China, the Uk and Canada combined.

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a key element in the brand valuation (see Methodology) is earnings projections and with Us banks disposing of their bad assets and the domestic property market starting to recover, the outlook on this front is better. an interesting indicator is the percentage of brand value to market capitalisation. as brand value is based on fundamentals, while market capitalisation moves with investor sentiment, a high brand value to market capitalisation suggests that a bank is undervalued. the research for The Bankers top 500 brands ranking is conducted by consultant brand Finance. Chief executive david Haigh says: in 2007 the brand value to market cap percentage of the Us banks in the top 100 was 12% and has been rising ever since, though not in a straight line, to reach 15% in 2013. the brand value over

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The Banker

February 2013

top 500 banking brands | cover sTory


INTRODUCTION

the same period has been much more constant, in the $160bn to $200bn range, with the exception of 2009 during the worst of the crisis. this suggests that markets have moved from overvaluing Us banks to undervaluing them. by contrast some emerging markets have seen huge increases in brand value over the past ve years, reecting the fast growth and more dynamic performance of their banks and the better establishment of their brands. russian brand values have performed the best with a 453% uplift since 2008, followed by indonesia (443%), the philippines (412%), Colombia (377%) and China (335%). as with The Bankers top 1000 World banks ranking, the presence and might of the Chinese banks has been ever growing. this year their total brand value reached $95.7bn, and agricultural bank of China recorded the highest leap in brand value of any bank $6.04bn which sent it up from 18th to 11th place. iCbC notched up the second highest value rise with $4.66bn, taking it up from 11th to seventh place. in a table of the highest number of places climbed, indonesias panin bank claims the top spot, rising from 492nd to 322nd. another good performances has come from russias sberbank, which increased its brand value by $3.39bn and rose from 17th to 13th position. it also occupies second position in the top brand value in Europe table, helped by the fact that all of its $14.2bn brand value is concentrated in the region.

METHODOLOGY
Brand Finance employs a discounted cash ow technique to discount estimated future royalties at an appropriate rate to arrive at a net present value of a banks trademark and associated intellectual property its brand value. The steps in this process are to: 1 Obtain brand-specic nancial and revenue data. The revenue was then segmented into the following revenue streams: retail banking, commercial banking, wholesale/investment banking, insurance, asset management and credit cards. 2 Model the market to identify market demand and the position of individual banks in the context of all other market competitors. Three forecast periods were used: I Estimated nancial results for 2012 using Institutional Brokers Estimate System (IBES) consensus forecast. I A ve-year forecast period (2013 to 2017) based on three sources: IBES, historic growth and gross domestic product (GDP) growth. I Perpetuity growth based on a combination of growth expectations (GDP and IBES). 3 Establish the royalty rate for each bank by: I Calculating brand strength on a scale of zero to 100 according to a number of attributes, including asset strength, emotional connection, market share and protability. I Determining the royalty rate for each revenue stream mentioned in step one. I Calculating the future royalty income stream. 4 Calculate the discount rate specic to each bank, taking account of its size, geographical presence, reputation, gearing and brand rating (see below). 5 Discount future royalty stream (explicit forecast and perpetuity periods) to a net present value the brand value.
Royalty relief approach

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in Latin america, the biggest gainer is state-owned banco do brasil, which saw its brand value rise by $2.62bn the ninth highest overall closing the gap on its brazilian rivals ita and bradesco, and giving it 22nd position in the main table. in country terms, brazil has the sixth largest sector brand value $38bn on the back of only eight brands, the lowest number of any of the top 10 countries. this illustrates the dominant position held by the major brazilian banks. Moving on to insurance, and brazils bradesco comes second to rbC in the table of insurance brand values of banks worldwide. spains santander takes the top billing in the retail ranking and JpMorgan in the wholesale/ investment banking table. in the Middle East, the four top rated banks held their places in the table Qnb, al-rajhi, national bank of abu dhabi and Emirates nbd but only Qnb was able to increase its brand value, from $12.6bn to $13.1bn. in africa, standard bank takes the top spot from Citi, while absa moves to second from third and nedbank from sixth to fourth. The Bankers top 500 banking brands is now in its eighth year and creates huge interest on publication. this reects the increasing awareness among bankers of the importance of brand to their business, and how it needs to be both invested in and protected. For many banks from emerging markets, this is a process that has moved ahead fast over the past eight years, but for developed country banks hit by the nancial crisis it has been a case of moving backwards as well as forwards.

Brand Finance uses a relief from royalty methodology that determines the value of the brand in relation to the royalty rate that would be payable for its use, were it owned by a third party. The royalty rate is applied to future revenue to determine an earnings stream that is attributable to the brand. The brand earnings stream is then discounted back to a net present value. This approach is used for two reasons: it is favoured by tax authorities and the courts because it calculates brand values by reference to documented third-party transactions and it can be done based on publicly available nancial information.
Brand ratings

These are calculated using Brand Finances randeta analysis, which benchmarks the strength, risk and potential of a brand relative to its competitors, on a scale from AAA to D. Conceptually, it is similar to a credit rating. The data used to calculate the ratings comes from various sources including Bloomberg annual reports and Brand Finance research.

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cover story | top 500 banking brands


Tables

Brand value winners 2013


2013
322 275 318 284 349 244 342 328 104 237 343 397 358 233 427 376 280 241 416 66 Rank Rank Change

Brand value Brand rating Market 2012 in rank Brand 2013 ($m) 2013 cap 2013 ($m) 492 170 Panin Bank 276 A 1524 438 163 Coface 355 AA- 747 462 144 FirstMerit Corporation 281 A+ 1635 427 143 SpareBank 1 SR-Bank 340 A 4116 483 134 Banco CorpBanca 252 A+ 4030 356 112 Virgin Money 440 A+ n/a 452 110 First Republic Bank 262 A+ 4412 434 106 VietinBank 271 A+ 2642 190 86 Bank of Moscow 1696 A 10,870 321 84 Espirito Santo Financial Group 459 A 1423 425 82 Aareal Bank 262 AA 1227 478 81 BTPN 213 A 3219 433 75 Nomos-Bank 243 A 2493 306 73 Inbursa 483 A+ 20,323 500 73 Newedge 195 AA- 653 443 67 Banco Galicia 226 A+ 959 338 58 Caixa Catalunya 347 A n/a 294 53 Rosbank 446 A 5603 468 52 Cetelem 200 AA- 556 113 47 Discover 2737 AA- 19,093

Brand value/ market cap (%) 18 47 17 8 6 n/a 6 10 16 32 21 7 10 2 30 24 n/a 8 36 14

Absolute Brand value winners 2013


Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand

Source: The Banker/Brand Finance

Agricultural Bank of China ICBC Chase Sberbank Bank of Tokyo-Mitsubishi UFJ Citi Bank of America Wells Fargo Banco do Brasil Socit Gnrale Capital One ANZ Woori Financial Group JPMorgan US Bancorp TD BNP Paribas Deutsche Bank Sumitomo Mitsui Financial Group RBC

Change in brand value, 2012-2013 ($m) 6037 4656 4444 3387 3281 3038 2860 2814 2619 2514 2508 2448 2201 2173 1983 1902 1764 1666 1635 1630

Source: The Banker/Brand Finance

Brand value Losers 2013


2013 2012 in rank 467 278 -189 434 253 -181 465 310 -155 462 309 -153 441 303 -138 428 293 -135 478 345 -133 420 288 -132 468 336 -132 449 318 -131 490 362 -128 448 329 -119 355 238 -117 383 269 -114 344 231 -113 387 274 -113 418 307 -111 353 246 -107 400 297 -103 451 350 -101
Rank Rank Change

Brand SNS Reaal Amundi Qatar Islamic Bank Van Lanschot Basler Kantonalbank Everbright Securities Peoples United Bank Banque Prive Edmond de Rothschild Indian Bank Bank BPH BRD Central Bank of India Arab Bank Attijariwafa Bank GF Securities IDBI Bank Ahli United Bank China Merchants Securities Commercialbank Allahabad Bank

Brand value Brand rating Market 2013 ($m) 2013 cap 2013 ($m) 165 A- 386 185 AA 573 166 A+ 4933 167 A 774 181 AA- 3339 195 A+ 7695 153 A 4338 198 163 175 147 178 245 221 261 218 199 248 212 173 A+ A A A A AA- A+ A A+ A+ A A+ A 1744 1677 1114 1762 1223 5417 6905 14,524 2701 3410 7701 4681 1668

Brand value/ market cap (%) 43 32 3 22 5 3 4 11 10 16 8 15 5 3 2 8 6 3 5 10

Absolute Brand value Losers 2013


Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand

HSBC Bradesco Goldman Sachs KKR Ita Standard Chartered Onex Hang Seng Bank Standard Bank Crdit Industriel et Commercial CITIC Securities ABN Amro ABSA PNC Industrial Bank of Korea E*Trade National Bank of Abu Dhabi Regions Financial Corporation Man Group Public Bank

Change in brand value, 2012-2013 ($m) -4733 -2082 -1911 -1514 -729 -602 -601 -490 -460 -404 -363 -361 -306 -273 -258 -243 -218 -200 -195 -184

Source: The Banker/Brand Finance

Source: The Banker/Brand Finance

Brand ratings definitions: AAA Extremely strong AA Very strong A Strong BBB-B Average CCC-C Weak DDD-D Failing Valuation date: All brand values in the report are for the year ending December 31, 2012

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The Banker

February 2013

cover story | top 500 banking brands


tables

Top 10 by brand value in north America


Rank 1 2 3 4 5 6 7 8 9 10

Top 10 by brand value in Latin America


Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

Wells Fargo Bank of America Chase American Express JPMorgan TD RBC Citi Capital One US Bancorp

26,044 18,219 17,848 13,823 10,503 9378 8592 7934 6897 6497

Value 2012 ($m) 23,229 19,266 14,456 13,518 8845 7741 7379 6217 4604 4514
Source: The Banker/Brand Finance

Brand

Value 2013
($m)

Bradesco Ita Banco do Brasil Santander Citi HSBC Morgan Stanley BBVA Goldman Sachs Deutsche Bank

13,610 12,442 9883 9594 4408 3174 1809 1694 1416 1034

Value 2012 ($m) 15,692 13,171 7264 9038 3977 3668 2143 1151 2731 1251
Source: The Banker/Brand Finance

Top 10 by brand value in Africa


Rank 1 2 3 4 5 6 7 8 9 10

Top 10 by brand value in Asia-Pacific


Value 2012 ($m) 1911 1784 1948 1049 988 1136 783 1224 610 681
Source: The Banker/Brand Finance

Brand

Value 2013
($m)

Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

Standard Bank ABSA Citi Nedbank First National Bank American Express Credit Suisse Goldman Sachs Standard Chartered Morgan Stanley

1505 1482 1465 1259 1045 750 740 637 528 429

ICBC China Construction Bank Agricultural Bank of China Bank of China Bank of Tokyo-Mitsubishi UFJ HSBC ANZ State Bank of India Bank of Communications Sumitomo Mitsui Financial Group

19,472 16,667 15,967 13,768 10,738 6483 5832 5729 5587 5206

Value 2012 ($m) 14,758 15,148 9929 12,537 6315 7797 3172 4472 4406 3759
Source: The Banker/Brand Finance

Top 10 by brand value in europe


Rank 1 2 3 4 5 6 7 8 9 10

Top 10 by brand value in the Middle east


Value 2012 ($m) 12,989 10,772 10,931 10,362 9697 7328 5205 8770 3944 4962
Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

Brand

Value 2013
($m)

BNP Paribas Sberbank Santander Barclays HSBC Rabobank Nordea Deutsche Bank Socit Gnrale ING

14,587 14,160 10,180 7644 7541 7406 6538 6316 6004 4911

QNB Al-Rajhi Bank National Bank of Abu Dhabi Emirates NBD Bank Hapoalim First Gulf Bank Kuwait Finance House Bank Leumi NBK Capital Samba Financial Group

1307 1192 988 971 792 775 751 692 587 568

Value 2012 ($m) 1264 1244 991 1038 774 713 449 545 512 740
Source: The Banker/Brand Finance

Source: The Banker/Brand Finance

Total brand value by region ($m)


Region Europe North America Central America South America Asia Middle East Africa Pacific Rest of the world/other Global brand value

2013 227,587 232,702 13,890 68,306 193,573 18,468 16,509 46,355 43,274
860,665

2012 201,774 202,976 2553 68,408 151,566 15,948 15,673 38,070 49,833
746,801

2011 267,631 215,144 2229 75,577 161,754 14,486 21,973 39,948 56,283
855,025

2010 257,209 165,689 1786 59,775 119,890 13,150 14,911 35,409 48,488
716,307

2009 153,581 128,420 1441 32,516 91,349 7376 11,527 23,326 32,514
482,050

Source: The Banker/Brand Finance

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top 500 banking brands | Cover story


tables

Top 50 by Total brand value by country


Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50

Top 10 by Asset/Wealth management


Rank 1 2 3 4 5 6 7 8 9 10

Country

US China UK Canada France Brazil Japan Spain Germany Australia Switzerland Russia Italy Netherlands South Korea India Sweden Turkey Singapore South Africa Malaysia Denmark Indonesia Austria United Arab Emirates Thailand Saudi Arabia Norway Poland Hong Kong Belgium Israel Colombia Taiwan Qatar Portugal Kuwait Mexico Ireland Chile Greece Philippines Hungary Nigeria Bermuda Kazakhstan Luxembourg Argentina Bahrain Czech Republic

Total brand value ($m) 230,574 95,692 66,490 44,731 44,062 37,957 37,333 33,031 28,496 28,175 22,031 19,480 19,074 17,288 15,429 14,494 13,343 9768 7311 7138 6226 5086 5020 4528 4423 3659 3476 3277 3253 2966 2478 2376 2089 2035 1902 1542 1537 1468 1430 1387 891 874 754 574 519 464 459 457 368 360

Count of brands 93 23 26 15 24 8 37 10 16 18 16 8 21 5 14 20 4 10 3 9 6 4 8 2 9 6 7 2 6 5 1 5 3 6 4 4 3 2 3 3 3 3 1 3 1 2 1 2 2 1
Source: The Banker/Brand Finance

Brand

Value 2013
($m)

Deutsche Bank Credit Suisse UBS Merrill Lynch Morgan Stanley Wells Fargo Blackrock State Street RBC JPMorgan

5676 4661 3705 3702 3196 3188 2730 2626 2214 2136

Value 2012 ($m) 3668 3375 3099 3392 2668 2589 2433 2517 1619 1788
Source: The Banker/Brand Finance

Top 10 by Insurance
Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

RBC Bradesco DZ Bank W&W RBS BNP Paribas Ameriprise Financial State Bank of India ICICI Bank Bank of China

949 649 640 529 399 344 340 257 252 244

Value 2012 ($m) 1010 1181 463 484 162 271 0 287 280 288
Source: The Banker/Brand Finance

Top 10 by Wholesale/investment banking


Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

JPMorgan Deutsche Bank HSBC Credit Suisse Morgan Stanley Barclays UBS BNP Paribas BNY Mellon Goldman Sachs

11,639 8897 5098 4738 4353 3479 3332 3187 3159 2112

Value 2012 ($m) 9814 9237 7512 4719 3679 5762 2709 2755 3170 3881
Source: The Banker/Brand Finance

Top 10 by credit cards


Rank 1 2 3 4 5 6 7 8 9 10

Top 10 by retail banking


Value 2013
($m)

Brand

American Express Chase Bank of America Visa Ita Citi Mastercard Capital One Barclays Discover

17,385 10,018 9249 7342 7244 6647 5418 5041 3412 2668

Value 2012 ($m) 16,791 8953 8407 6834 7514 5393 5177 3519 3278 1313
Source: The Banker/Brand Finance

Rank 1 2 3 4 5 6 7 8 9 10

Brand

Value 2013
($m)

Santander Wells Fargo Bradesco BNP Paribas Chase HSBC Sberbank Citi ICBC Bank of Tokyo-Mitsubishi UFJ

18,414 18,090 12,961 12,570 12,083 11,375 8765 8468 8245 7611

Value 2012 ($m) 17,032 16,511 14,512 9516 9036 13,949 6632 3730 6097 5638
Source: The Banker/Brand Finance

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