Standard Bank has been named Africa’s most valuable banking brand following a 26 percent increase in brand value to US$1.583 billion, according to the latest report by Brand Finance published in The Banker magazine.
The continent’s biggest lender by assets impressive increase saw it inch ahead of its South African compatriot, First National Bank (whose brand value also went up 18 percent to US$1.581 billion). Standard Bank beat FNB to claim the title with a margin of just US$2 million.
Brand Finance Valuation Director Declan Ahern said that Standard Bank’s impressive performance comes off the back of hard work over the past few years, with the brand’s reputation steadily increasing since 2019. “The new brand positioning “It can be” announced mid-way through 2020, alongside continued diversification and adaptability, have clearly paid dividends. Overall, the performance of African brands has been overwhelmingly positive across the board this year, and highlights the impressive strides made by brands from the continent in recent years, ”Ahern said.
The brand valuation consultancy Brand Finance tests the 5 000 biggest brands to the test every year and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s top 500 most valuable and strongest banking brands are included in the annual Brand Finance Banking 500 ranking.
Overall, there are 20 African brands in the ranking, with South Africa dominating the African contingent as seven of its brands featured and six of which sat at the top of the continental ranking. ABSA (US$1.437 billion), Nedbank (US$1.018 billion), Investec (US$992 million), and Capitec Bank (US$625 million) joined Standard Bank and First National bank at the top.
Beyond South Africa, Nigeria boasts five brands in the ranking with Access Bank (US$379 million) the nation’s most valuable.Egypt and Morocco each have three, and Kenya had two.
According to Brand Finance, the brand values of world’s largest banks grew for first time in three years. It said that looking at the ranking from a global perspective, the world’s top 500 banking brands have turned the tide on brand value contraction for the first time in three years, showing a 9 percent year-on-year brand value growth to reach an all-time high of US$1.38 trillion
The brand value of the world’s largest banks shrunk by 2 percent by the beginning of 2020 (US$1.33 trillion) and a further 4 percent by 2021 (US$1.27 trillion). This was attributed to being nitially caused by economic uncertainty and interest rate movements and the situation exacerbated by the pandemic, which saw profit and interest rates take a hit.
“However, as nations continued to adapt to COVID-19 and economies rebounded over the past year, loan loss provisions were much less significant than initially forecasted by industry experts. Furthermore, improved digitalisation by banking brands, coupled with a strong government intervention and economic recovery around the world resulted in a higher than expected industry profitability in 2021,” read the report.
“While this year’s overall brand value growth is undoubtedly a positive sign for the industry, it signifies a meagre 2% increase from US$1.36 trillion, which was the combined pre-pandemic brand value of the world’s top 500 banking brands in 2019. Particularly in Europe, banks are still feeling the effects of COVID-19, where weak profits are not helped by cost inefficiency and insufficient investments in digital technology.”
Brand Finance Chairman and chief executive David Haigh said that as banks continued to battle the fallout from the COVID-19 pandemic, the importance of a solid brand was more significant than ever. “Banking products are becoming more commoditised, and banks will need to continue differentiating themselves from other competitors in the market, through the use of their brand, particularly in the face of an emerging threat from challenger brands and decentralised finance in the future,” Haigh said.
“Many of the world’s largest banking brands have come through the worst of the pandemic stronger – a testament to the role they have played in supporting the real economy through the past 12 months,” said Joy Macknight, editor of The Banker. “Banks’ digital transformation efforts over recent years meant they were able to respond faster to client needs, as well as deliver new products and services, which has boosted banks’ reputations in the eyes of their retail and corporate customers.”
Chinese banks maintained the lead in the Brand Finance Banking 500 2022 ranking, accounting for one third of total brand value and worth a cumulative US$454.4 billion. While their global counterparts saw drops in brand value over the past two years, Chinese banks remained largely impervious to these issues. Over the past year, China’s economy continued to recover steadily despite a complex and ever-changing domestic and international environment. In the first half of 2021 alone, the nation’s GDP increased by 13 percent year-on-year.
The world’s largest bank by total assets, ICBC’s brand value increased by 3 percent to US$75.1 billion, making it the world’s most valuable banking brand again as well as the 8th most valuable brand across all industries in the Global 500 2022 ranking. Over the past year, ICBC continued to fare well with consumers and expand its portfolio, opening branches in foreign markets such as Mexico, Argentina, and most recently Panama. ICBC continued to outshine its competitors, holding a healthy brand value ahead of China Construction Bank (up 10 percent to US$65.5 billion) and Agricultural Bank of China (up 17 percent to US$62.0 billion), which rank second and third, respectively.
US banks account for almost a quarter of the total brand value in the Brand Finance Banking 500 2022 ranking, worth a cumulative brand value of US$313.7 billion. Of these 76 brands, Bank of America (up 12 percent to US$36.7 billion), Citi (up 7 percent to US$34.4 billion), Chase (up 5 percent to US$30.1 billion), Wells Fargo (down 6 percent to US$30.1 billion), and JP Morgan (up 23 percent to US$28.9 billion) have held onto their spots in the top 10 of the world’s most valuable.
There were 30 newcomers have joined the Brand Finance Banking 500 2022 ranking this year, including two African new entrants – Kenyan Equity Group (338th with brand value US$388 million) and Morocco’s Bank of Africa (466th, with brand value US$200 million).
Equity Group has joined another Kenyan bank in the ranking – Kenya Commercial Bank (366th with brand value US$338 million), which itself saw an impressive 61 percent brand value increase this year.
Of all new entrants across all countries, with an eye watering brand value increase of 181 percent, Cadence Bank has entered the ranking as the fastest-growing brand of 2022, reaching a brand value of US$403 million. The US-based bank has recently entered into a merger agreement with BancorpSouth Bank, which held a brand value of US$266 million in the 2021 iteration of the Brand Finance Banking 500 ranking. As part of the agreement BancorpSouth has rebranded to Cadence Bank. The merger aims to provide more customer and relationship-focused financial services to Cadence Bank’s extensive customer base across the southern US.
Apart from calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Certified by ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 100,000 respondents in more than 35 countries and across nearly 30 sectors.
According to these criteria, Indonesia’s BCA is the strongest bank in the Brand Finance Banking 500 2022 ranking, following a +2.5 point increase to reach a Brand Strength Index (BSI) score of 94.0 out of 100 and an elite AAA+ brand strength rating.
As one of the biggest banks in the ASEAN region and Indonesia’s largest lender by market value, BCA has performed strongly across key metrics, particularly those pertaining to customer satisfaction. In Brand Finance’s original market research, BCA outperformed its peers for reputation and quality, and scored highly for value for money.
South Africa’s Capitec Bank has claimed the spot of the second strongest brand in the Brand Finance Banking 500 2022 ranking, boasting a BSI score of 92.4 out of 100 and a corresponding AAA+ brand strength rating. Despite having only been around for 22 years, Capitec Bank has already overtaken many of South Africa’s traditional banks, becoming the second largest bank by market cap. The brand continued to position itself as the nation’s leading retail franchise, delivering a low-cost alternative to traditional banks, and has already built a strong, loyal customer base. This helped boost Capitec Bank’s rank as sixth in the world for familiarity, third for its quality of services, and it was noted as the fifth easiest bank to deal with. As the brand continued to uphold a customer-centric business model focused on providing low costs and high interest rates on deposits, it remained poised for further success.
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