SA banks lose brand value

South Africa’s banks have seen their brand value slip in 2014, according to new data out from Brand Finance and The Banker.

Asset valuation consultancy, Brand Finance, in association with The Banker, has released its 2014 Banking 500 list, which ranks the world’s top 500 banking brands according to their brand value.

Brand value is determined through the “royalty relief” method, which determines the value a company would be willing to pay to license its brand as if it did not own it.

“This approach involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for the use of the brand,” the group said.

Standard Bank remains South Africa’s top banking brand, with a brand value of US$1.6 billion (R17.7 billion) – but has slipped from an overall 103rd position down to 114th.

Standard Bank is currently engaged in a strategy to downscale its international presence.

As part of its strategy the group is selling off 60% of its London operations to the Industrial and Commercial Bank of China (ICBC) in a US$765 million (R8.5 billion) deal, with further options for the Chinese giant to acquire a further 20%.

ICBC acquired a 20% stake in Standard Bank Group in 2007, for US$5.5 billion (R60.9 billion).

South African banks

The rank-slip trend was experienced across all but two of South Africa’s financial institutions, with the only exceptions being Rand Merchant Bank (RMB) and Investec.

RMB – South Africa’s lowest-ranked bank – saw its brand value increase from US$203 million (R2.2 billion) to US$219 million (R2.4 billion).

Investec climbed to a brand value of US$908 million (R10 billion) from US$682 million (R7.5 billion) before.

WesBank, a provider of vehicle finance and car insurance solutions, increased its brand value by US$28 million to US$391 million (R4.3 billion), but still slipped in ranking.

South African banks brand value (in US$ billions)

2014 rank
2013 rank
Bank 2013 Brand Value
2014 Brand Value
114 103 Standard Bank 1.705 1.595
132 115 Absa 1.491 1.233
136 119 Nedbank 1.312 1.196
146 133 First National Bank 1.139 1.056
155 185 Investec 0.682 0.908
281 269 WesBank 0.363 0.391
390 410 RMB 0.203 0.219

World’s best bank brands

Unsurprisingly, the world’s biggest bank by market capitalisation, Wells Fargo, is also the world’s most valuable banking brand according to Brand Finance.

Wells Fargo claimed the top spot as the world’s biggest in mid-2013 – a position it has retained since – moving past the Industrial and Commercial Bank of China (ICBC) who dominated before.

According to Brand Finance, the world’s number one bank brand has a value over US$30.2 billion – up from 2013’s valuation of US$26 billion.

The top 5 most valuable bank brands feature the United States’s “big four”, with Wells Fargo followed by Bank of America (third, at US$26.6 billion), Citi Bank (fourth, at US$24.5 billion) and Chase (fifth, at US$23.1 billion).

Chase, of JPMorgan Chase, dropped from 2013’s number 2, to 2014’s number 5, replaced by the UK’s HSBC, which climbed to a brand value of US$26.8 billion.

Top 10 world bank brand values (in US$ billions)

2014 rank 2013 rank Bank 2013 Brand Value 2014 Brand Value
1 1 Wells Fargo 26.044 30.242
2 3 HSBC 22.865 26.870
3 4 Bank of America 22.397 26.683
4 5 Citi 21.677 24.518
5 2 Chase 23.408 23.157
6 7 ICBC 19.820 22.803
7 9 BNP Paribas 18.573 20.206
8 6 Santander 20.119 20.021
9 10 China Construction Bank 16.949 18.954
10 11 Agricultural Bank of China 15.967 17.783

($1=11.08 South African Rands)

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SA banks lose brand value