B S :M Saraswathy | Mumbai February 6, 2014 Last Updated at 00:50 IST
Study shows that country's largest lender SBI had a 32.2% decrease In its Brand Value in 2014 compared to 2013
India’s top banks have suffered losses in their brand value, according to a study by brand valuation agency Brand Finance. The study, Brand Finance Banking 500, showed the country’s largest lender State Bank of India (SBI) had a 32.2 per cent decrease in its brand value in 2014, compared in 2013.
Brand Finance calculates the value by determining royalties a corporation would have to pay to license its brand if it did not own it, known as the ‘royalty relief’ method.
“A brand value that last year was close to $ 6 billion now stands at just over $ 4 billion, meaning that SBI has now dropped out of the global Top 50,” said the agency in a statement.
ICICI Bank and HDFC Bank, India’s next two most valuable bank brands also are also down, said the study.
The study also said Punjab National Bank has lost nearly 22 per cent of its brand value, which now stands at $ 511 million. The collective losses means the total brand value of India’s banks is down 13 per cent or a net $1.83 billion dollars. As a result, India has fallen behind Sweden and South Korea and is now 17th in terms of total national bank brand value.
Despite this, the study said India’s smaller banks had been forging ahead with brand value growth approaching 10, 20 or even 50 per cent. Union Bank, for instance, has grown its brand value by 49 per cent in the last year to reach $321 million, entering India’s Top-10 in the process. It has overtaken IDBI, which despite dropping out of the Top 10, has itself had a successful year, adding $52 million in brand value.
Apart from Union Bank, many others such as IDBI, Kotak Mahindra Bank, Central Bank of India,Allahabad Bank, Indian Overseas Bank, Syndicate Bank and Oriental Bank of Commerce have all seen their brand value increasing. Some of the banks have also improved their global ranks. While IDBI’s brand value grew by $52 million or 23.6 per cent, Kotak Mahindra’s value grew by $36 million or 8.1 per cent over the previous year.
The agency said the rating was a benchmark of the strength, risk and potential of a brand, suggesting that in spite of the pessimism surrounding India’s short-term economic outlook, many brands are poised for further improvements next year.
Globally, Wells Fargo has held its position as the world’s most valuable banking brand, with a total brand value of over $30 billion. According to the study, western brands in general have shown promising improvements. HSBC’s brand value has grown by $4 billion, while UBS’ is up $3.35 billion, a 46 per cent increase.
The total for Greece is up over 100 per cent, as successful austerity measures have begun to rapidly transform the country’s economic outlook.
Like India, Brazil and Russia have also experienced sudden slowdowns in their national bank brand value growth. Their national brand value totals are down 6 per cent, 13 per cent and 23 per cent, respectively, reversing a trend of rapid bank brand value growth for all BRIC countries over the last few years.
China, however, continues to grow strongly. Its banks have added a total of nearly $19 billion and there are now three Chinese bank brands in the global Top 10.
As well as a brand value, each of the 500 brands in the table is accorded a brand rating; a benchmark of the strength, risk and potential of a brand relative to its competitors, similar to a credit rating.
Chart 1: The World’s Most Valuable Banking Brands (Top 10)
Rank 2014 Brand Domicile Brand Value (BV) in USD million BV Change (in %)
1 (1) Wells Fargo US 30242 16.12
2 (3) HSBC UK 26870 17.52
3 (4) Bank of America US 26683 19.13
4 (5) Citi US 24518 13.11
5 (2) Chase US 23157 -1.07
6 (7) ICBC China 22803 15.05
7 (9) BNP Paribas France 20206 8.79
8 (6) Santander Spain 20021 -0.49
9 (10) China Construction Bank China 18954 11.83
10 (11) Agricultural Bank of China China 17783 11.37
*Figures in brackets refer to their rank in 2013
Source: Brand Finance
Chart 2: Some of India’s Most Valuable Banking Brands
Global Rank 2014 Brand Brand Value (BV) 2014 in USD million BV Change (in %)
54 (38) State Bank of India 4063 -32.22
107 (99) ICICI Bank 1698 -6.74
133 (126) HDFC Bank 1223 -0.40
178 (175) Axis Bank 766 3.28
208 (206) Bank of Baroda 606 5.53
227 (189) Punjab National Bank 511 -21.60
245 (242) Kotak Mahindra Bank 481 8.10
275 (258) Bank of India 397 3.32
301 (292) Canara Bank 339 2.82
312 (392) Union Bank of India 321 48.94
*Figures in brackets refer to their Global Rank in 2013
Source: Brand Finance
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