Singapore Banks lead the ASEAN bank brand rankings in the ‘Brand Finance Top 500 Most Valuable Bank Brands 2018’

Every year, leading global brand valuation and brand strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. The results of this analysis are then ranked, with the world’s 500 most valuable banking brands featured in the Brand Finance Banking 500, also published in The Banker magazine.

Singapore bank brands remained crowned as the top 3 ASEAN bank brands in the global brand rankings for the top 500 bank brands. DBS retained its status as the ASEAN’s most valuable banking brand and managed to improve 12 places globally. The brand value for DBS has improved significantly over 2017, reaching US$6.5 billion. DBS has become the first ASEAN bank to be the Top 50 most valuable bank brand worldwide and also the first ASEAN bank to cross US$6 billion.

OCBC and UOB retained the 2nd and 3rd position in ASEAN, with global ranking of 64th and 66th. The strong growth for DBS and OCBC can be partly attributed to their recent acquisitions which provided the boost to the revenue base.

Commenting on the brand value growth and rankings, Samir Dixit, Managing Director of Brand Finance Asia Pacific highlighted that “It’s very heartening to see the rise of ASEAN brands amongst the global rankings and the dominance of Singaporean banks both globally and in ASEAN. The Malaysian, Indonesian and Vietnamese banks however have also been rising steadily both in value and in brand strength and this will likely pose some threat in the future to the 3 Singapore banks.”

Samir added that, “Our annual brand equity research for the banks indicates that there still exist wide gaps for banks brand strength due to higher product focus and very little brand differentiation. Therefore, banks that will focus on the brand will benefit disproportionately.”

Samir highlighted that “The # 2 and # 3 always have to try harder and it’s worth highlighting that unlike DBS and OCBC, UOB had a more organic, non-acquisition based growth of revenues and brand value and remains highly competitive in the region as the 3^rd most valuable ASEAN bank brand”. If not for the acquisition by OCBC, UOB would have been in a strong position to challenge them at #2.”

Brand Finance’s research further indicates that ASEAN’s consumers growing affinity for brands and branded goods is helping set a solid foundation for competitive brands from the region. This is evident by the 3 Indonesian banks (BCA, Mandiri and BRI) squeezing their way to being the Top 3 Strongest bank brand in ASEAN and further demonstrated by BCA being the 9^th Strongest bank brand globally.

Of the total 41 AAA- rated (brand strength rating) bank brands globally, 8 are from ASEAN with DBS being AAA- rated brands from Singapore followed by the 3 Indonesian banks which are Mandiri, BRI and BNI, which also leaves BCA as the only ASEAN bank brand to have attained the AAA rated brand.

It’s the strong growth of ASEAN region as a whole and coupled with a consumer preference for home grown brands that is driving the phenomenal increase in brand values of the ASEAN bank brands which the western banks cannot hope to match.

ASEAN bank brands more recent growth has also been due to accelerating M&A activities in the region. These have been providing opportunities for the ASEAN banks beyond its growing domestic market.

Globally, the Industrial and Commercial Bank of China (ICBC) at US$59.1 bn and China Construction Bank at US$56.7 bn have taken out 1st and 2nd place respectively as the world’s most valuable bank brands for 2018. China Construction Bank rose from 3rd place to 2nd, overtaking US bank Wells Fargo at US$44.1 bn, which slipped to 3rd despite itself growing by 6%.

“Globally, the value of the world’s 500 biggest bank brands increased by 11.6% over the last year to US$1.18 trillion, with strong performance in many countries around the world. However, Chinese brands in the Brand Finance Banking 500 league table outperformed the global average with outstanding growth of 23%,” said Brand Finance CEO, David Haigh.

Chinese Banks Dominate Top 10

The world’s most valuable bank brand, ICBC, was also awarded the highest-possible brand strength rating of AAA+. In the aftermath of the 2008 global financial crisis, ICBC has enjoyed robust growth in the value of its brand, based upon a very strong foundation in the Chinese domestic market. In recent years, its domestic strength has served as a platform for global expansion.

Chinese bank brands dominated the top 10, with the Bank of China benefiting from a 34% increase to its brand value to US$41.8 bn, while the brand value of Agricultural Bank of China grew by 31% to US$37.3 bn. Meanwhile, American bank brands Chase (up 15% to US$38.8 bn) and Bank of America (up 10% to US$33.3 bn) saw good growth, but could not keep up with the booming Chinese bank brand values.

China extended its lead over the USA with the largest aggregate brand value of banks in the global top 500 listing, with Chinese bank brand values growing by 22% over the last year to a combined total of US$317 bn. This growth comes from just 45 Chinese banks, while the USA continues to host the largest number of bank brands in the global top 500 listing, with 76 such brands.

Bank Brands Under Threat From Technology Competitors

Bank brands may soon face competition from big tech-focused companies such as Apple, Facebook, Google, and Amazon in the broader financial services sector. Each have launched various consumer-facing financial services in recent years, and each brand represents new challenges to traditional banking services, with the tech company brands more aligned to modern customer expectations around instant multi-channel and multi-platform services.

“The big tech companies are already encroaching into areas traditionally supplied by banks such as payments and financing, and are backed by powerful brands. Facebook and Google already have brand strengths that rank above all banks,” said Haigh. “The big banks have been giants of their industry, with competition traditionally coming from within the banking sector. Now, challenger brands come from outside banking with great customer equity scores.”

Regional Leaders

Besides ICBC, the world’s only other AAA+ ranked bank brand is Sberbank of Russia. Sberbank is, like ICBC, focused on its domestic market. Recently, Sberbank announced new plans to combat the threat from technology competitors, including a blockchain investment lab. It is likely that Sberbank is well placed to confront these external competitors, with strong brand equity amongst its key stakeholders in Russia.

“Sberbank’s performance this year in both brand value and brand strength has been exemplary,” said Haigh. “The brand has solidified its pre-eminence in eyes of the Russian populace, scoring exceptionally well in the Brand Finance original consumer equity research that feeds into our valuations. As start-ups and tech ecosystems alike encroach on the financial services industry, Sberbank’s dominance as a brand will provide a solid foundation to adapt and thrive.”

European banks have performed moderately, with growth of 8% in big bank brand value over the last year, slightly below the global growth of 11.6%. The four most valuable bank brands in Europe all suffered mediocre performance, including HSBC (down 12% to US$18.3 bn), Santander (up 2% to US$16.2 bn), BNP Paribas (up 1% to US$13.7 bn), and Barclays (up 4% to US$13.5 bn). This makes Sberbank’s performance (up 28% to US$11.6 bn) in Russia even more remarkable.

In the Middle East, the Qatari National Bank (QNB) saw its brand value grow 11% year on year to US$4.2 bn, defending its title as the Middle East’s most valuable banking brand despite geopolitical challenges throughout the region. QNB consolidated acquisitions and continued to expand in international markets, both in in the Middle East and South East Asia.

“Amidst trying times for the reputation of the banking industry as a whole, QNB manages not only to attract customers in new markets such as South East Asia, but also to solidify its image among the existing customer base,” said Haigh.

Write to b.lee@brandfinance.com for a complete list of the top 500 bank brands value and rankings!