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Who has the most valuable bank brand?

I just got The Banker magazine’s February issue discussing the top banking brands of the world. Timely, as I have been talking about trust and brands this week. In particular, I guess I was surprised the Chinese banks are the strongest brands across the board in 2018, with the top 10 names being:

      Rank, Name, Country, Brand Value, Last year’s position

  1. ICBC, China, $59.2bn (1)
  2. China Construction Bank, China, $56.8bn (3)
  3. Wells Fargo, USA, $44.1bn (2)
  4. Bank of China, China, $41.8bn (5)
  5. Chase, USA, $38.8bn (4)
  6. Agricultural Bank of China, China, $37.3bn (7)
  7. Bank of America, USA, $33.3bn (6)
  8. Citi, USA, $30.8bn (8)
  9. HSBC, UK, $18.3bn (9)
  10. JPMorgan, USA, $17.7bn (11)

Compare this with just seven years ago, when the 2011 list was released:

  1. Wells Fargo, USA, $28.9bn (2)
  2. Bank of America, USA, $26.7bn (1)
  3. Bradesco, Brazil, $18.3bn (4)
  4. Santander, Spain, $17.0bn (3)
  5. ICBC, China, $16.8bn (6)
  6. China Construction Bank, China, $16.8bn (5)
  7. Itau, Brazil, $16.7bn (13)
  8. Chase, USA, $14.2bn ((9)
  9. Bank of China, China, $12.9bn (10)
  10. BNP Paribas, France, $12.8bn (8)

What’s happened to the European and Brazilian bank brands? Oh yes, a sovereign debt crisis and a rotten economic record in Brazil. That left the way open for the American and Chinese banks, and the Chinese have taken over.

I said this ten years ago. Here’s an extract from a chapter I wrote for The Future of Banking book back in 2006:

The re-energising of Chinese banking will continue. This was demonstrated by the flotation of the Industrial & Commercial Bank of China (ICBI) on 20 October 2006.

The IPO turned out to be the largest the world has ever seen, with the $19 billion sale dwarfing the $12 billion raised from 53 IPOs in the second half of 2006 on Wall Street. Even more noteworthy was the fact that, by the end of the first day of trading, the Chinese lender had a market value of about $157 billion which was more than Goldman Sachs Group and Lehman Brothers Holdings put together, according to Fortune magazine.

During this renovation of Chinese banking we will see a new form of banking appear, which will teach Europe’s and America’s banks a few lessons.

The biggest lesson European and American banks will learn from China is in technology. Just as America has been the technology powerhouse of the world for the last half a century, China intends to be the world’s technology powerhouse for the next. 

In fact, I’ve been watching Chinese developments ever since their reforms to join the World Trade Organisation in 2001, and have consistently been predicting that the world will look East in the 21st century, having looked West in the 20th.

This was not popular when I presented these thoughts at US banking conferences ten years ago. In fact, I was near enough booed off stage. They didn’t want to hear it. Not surprisingly, they just said I was giving the same mantra as other scaremongers having seen this happen in manufacturing, where American jobs went to China. Mind you, it probably didn’t help that I played this video in the middle of my presentation:

America first and let’s make America great again is an unsurprising message to get Donald Trump elected, because America’s legacy infrastructure is holding it back. Ten years later, not only are China’s bank brands the most valuable, but their banks are also dominating the rankings for the biggest banks in the world.

This will continue for the foreseeable future and is why I talk about a three-stream world. It is also why I’m not looking West for innovation and leadership, but looking east.

Anyways, to finish the bank branding story, here’s an excerpt from deputy editor of The Banker Joy Macknight’s review:

A decade on from the global financial crisis, the world’s top banking brands are thriving, led by impressive results in China. Joy Macknight reports.

Despite facing an increasingly regulated market, suppressed interest rates, macroeconomic uncertainty and changing customer expectations, the world’s top banking brands have continued to flourish. While The Banker’s Top 500 Banking Brands ranking smashed the trillion-dollar barrier for the first time in 2017, this year’s elite brands have added a further 10%, bringing the aggregate valuation to $1181bn.

“The growth mainly stems from strong financial performance generally across the sector, with market capitalisation increasing by an average of 14.9%,” says Declan Ahern, consultant, at Brand Finance, which compiles the ranking for The Banker. “Forecasts were also up, reflecting optimism among analysts in the sector.”

The strong results pushed the average brand strength index of the top 100 brands up from 75.5 to 76. “This has had a big effect on the total value, as 79% of the total brand value is held in this top 20%,” adds Mr Ahern.

China still leads

Chinese banking brands experienced another year of striking growth, increasing the country’s total banking brand valuation by 22% and widening the gap between itself and the US. Impressively, China’s aggregate brand strength of $317.4bn is based on just 45 banks, 84% of which expanded their brand value over the past year.

The US, in second place, increased its aggregate brand valuation by 8% and added six banks to the Top 500 ranking, bringing the total number to 76. However, the country’s top three banking brands – Wells Fargo, Chase and Bank of America – slipped by one place each, losing out to Chinese brands despite increasing their brand value. Overall, one in three US banks in the Top 500 saw a contraction in brand valuation.

While Mexico saw the largest drop in aggregate brand value, this can be attributed to Banamex’s rebranding as Citibanamex, which is now counted within the Citi brand and not listed separately. All four Mexican banks in the Top 500 – Banorte, Inbursa, Banco Azteca and Compartamos Banco – increased their brand value year on year.

To find out all the details, hop over here.

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • GaZZA

    Very informative Chris, thank you. China Construction Bank has become the first Chinese bank to open its doors as a standalone branch in New Zealand – signalling a significant ramping up of funding for New Zealand infrastructure projects. CCB already has involvement in some significant infrastructure projects, such as the Puhoi-Warkworth Highway and the Christchurch mountain bike park. In a sense, one might eventually see NZ as the Southern end of 21st Century Maritime Silk Road, especially since The Pacific Islands Forum has welcomed China’s push which will include Oceania.

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