Wells Fargo has maintained its lead in The Banker's Top 500 Banking Brands survey, but it is the impressive performance of China's leading lenders, many of which have gained several places in the ranking, that really stands out.

The success of a financial services brand is harder to measure than that of a consumer product, such as a smartphone or a chocolate bar. An article published in the Journal of Brand Management in 2004 by professors James Devlin and Sarwar Azhar, entitled ‘Life would be a lot easier if we were a Kit Kat’, examined this very problem and many of the challenges that it detailed. They still remain a decade later. Nonetheless, the exercise is well worth the effort.

The Banker’s Top 500 Banking Brands ranking measures the value of financial services firms across the world, analysing specific sectors and geographies, and identifying the brands that have improved the most, as well as those that have suffered the greatest setbacks.

The list is compiled by consultancy Brand Finance using the royalty relief methodology, which ranks firms based on the licensing rate that a third-party would need to pay to use that company's brand. The list is generated from data that looks at past financial performance as well as forecasts, the long-term prospects of the macroeconomic environment they operate in, and individual brand strength in relation to direct competitors.

China's charge

For the third consecutive year, San Francisco-based Wells Fargo leads the overall ranking with a brand value of just less than $35bn, a $4.68bn increase on its 2014 value. The biggest movers in the top 10, however, were China's lenders, several of which have seen significant increases in brand value that have helped them move up the ranking.    


“The Chinese economy has been doing well for a number of years but I think this has been the first year, in terms of brand value, when Chinese banks have climbed up the tables and stood out,” says Bryn Anderson, chief operating officer of Brand Finance.

ICBC moved into second place from sixth, while China Construction Bank went from ninth to fourth position and showed the largest growth globally in brand value – experiencing a $7.46bn increase. Agricultural Bank of China also improved its ranking from 10th to eighth place, with 9th position now occupied by Bank of China, which moved up three places from 12th.

Mr Anderson says that this movement is not just down to the financial results of these lenders – although profits do play an important role – but that it is owing to other softer factors and to these banks’ efforts to be seen as international players. “We saw this through scores such as familiarity, preference and brand satisfaction. These are the most emotive factors [of our calculations] and Chinese banks have done better than in the past in this area,” says Mr Anderson.

Scores in these categories are measured through surveys of both retail and corporate clients.

Top banking brands

Brand matters

Wells Fargo also topped the ranking in the retail banking category and, again, Chinese lenders made impressive moves in this list, including ICBC, which ranked in fourth place, up from seventh last year. As was the case in the 2014 ranking, ICBC, China Construction Bank, Bank of China and Agricultural Bank of China dominate the top four places in the wholesale banks list.

The wealth management ranking, however, presents a different and perhaps more conservative picture. Aside from the distinct lack of any emerging market brands in the top 10, UBS’s lead continues to characterise this ranking. Johan Jervoe, head of brand management at the Swiss-based bank, says that brand values colour any relationship between employees and clients. He draws a parallel to his previous experience at a very different brand.

"I used to work for McDonald’s, and when you walk into a restaurant you walk into the brand," he says. "So when you sit down with a wealth manager, when you talk to the front or back office of a private bank, you experience its brand. In practical terms, we have very specific guidelines and frameworks for employees about how we communicate a house view, the importance of how we communicate that view, and what products we tend to recommend to clients with certain requirements."

Mr Jervoe also notes that spontaneous referrals, particularly from clients that have the most challenging requirements, are highly valuable. "You get famous for stuff that most people can’t do," he says.

On a country basis, the US remains the largest player by aggregate banking brand value, and is worth almost $202bn. As was the case in last year’s ranking, it is followed by China and the UK but, in a change from 2014, fourth place is now occupied by Canada, which moved up from sixth position. Mr Anderson says that Canadian brands have always remained very solid and show steady, reliable progress.

If the UK is the largest European country by aggregate banking brand value, it is France that is home to the largest single lender by this measure. Paris-based BNP Paribas continues to top the European banking brand list – it is worth about $11.5bn – even though it experienced the biggest decrease in brand value globally, with a $5.27bn decrease in its overall value. This can be largely explained by France's deteriorating economic outlook, says Mr Anderson. The country's aggregate brand value decreased by 19% compared with the 2014 ranking.

BNP Paribas is followed by Dutch lender ING and Russia’s Sberbank, which were also in the top three in last year’s list. The North American list is also largely unchanged, with Chase and Bank of America following, although at some distance, Wells Fargo.

Courtesy call

In Latin America, Bradesco replaced Santander as the most valued brand in the region, with a $12.4bn valuation, up $1.79bn compared with 2014. Luiz Carlo Angelotti, head of investor relations at Bradesco, believes that the bank's strength is its ability to work with any type of client, including less affluent individuals and microenterprises.

“We have a strong balance sheet and high credibility in the Brazilian financial system. We are present across the whole country and have an ‘open-door’ policy: we don’t just serve a small selection of clients. We can offer [products and services] for all social classes and company sizes,” he says, adding that technology is crucial to this policy, and that Bradesco will invest 5bn reais ($1.87bn) in IT infrastructure this year.

Brand Finance’s Mr Anderson says: “[Bradesco] invested a lot to increase its market share and customer base in lower and middle classes. The income growth from these classes was more than 30% in the past three years in Brazil, much more than the rest of the population. Bradesco was the only one to customise products and services to fit their needs and it has invested in new technologies such as touch ID apps and digital cheque deposits.”

There was a change at the top of the African ranking too, with Citi displacing Standard Bank at the top of the regional table, after its brand value rose to almost $2.1bn, up by $762m compared with 2014. Dermot Boden, chief brand officer at Citi, says: “The key branding challenges in Africa are the extreme diversity of the continent, and the increasing visibility of the many local banks. To address these issues, Citi has created a series of vivid stories that we call ‘progress makers’, which illustrate how our clients in Africa, with our support, enable progress in the communities where they operate.”

Effective communication, strong connection with the local community and state-of-the art technology are clearly all components of a good banking brand. However, the secret of a good brand may be distilled to an even simpler concept, as Wells Fargo’s chief marketing officer, Jamie Moldafsky, points out when she quotes the lender’s founder, Henry Wells, who in 1864 said: “We have one very powerful business rule. It is concentrated in one word: courtesy.”


Brand Finance employs a discounted cash flow technique to discount estimated future royalties at an appropriate rate to arrive at a net present value of a bank’s trademark and associated intellectual property – its brand value.

The steps in this process are to:

1 Obtain brand-specific financial and revenue data. The revenue is then segmented into the following revenue streams: retail banking, wholesale/commercial banking, insurance, asset/wealth 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:

  • Estimated financial results for 2014 using Institutional Brokers Estimate System (IBES) consensus forecast.
  • A five-year forecast period (2015 to 2019) based on three sources: IBES, historic growth and gross domestic product (GDP) growth.
  • Perpetuity growth based on a combination of growth expectations (GDP and IBES).

3 Establish the royalty rate for each bank by:

  • Calculating brand strength on a scale of zero to 100 according to a number of attributes, including asset strength, emotional connection, market share and profitability. 
  • Determining the royalty rate for each revenue stream mentioned in step one.
  • Calculating the future royalty income stream.

4 Calculate the discount rate specific 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 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 financial information.

Brand ratings These are calculated using Brand Finance’s ßrandßeta 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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