The total brand value of the world’s 500 largest banks has declined for the first time since 2009.
Research by independent brand valuation consultancy Brand Finance found the global brand value of the top banks fell from $1.36 trillion at the start of 2019 to $1.33 trillion for 2020.
Chinese banks occupy the top four places in the Brand Finance Banking 500, with ICBC retaining first place overall. It is the country’s biggest lender with 600 million customers.
Five US banks are in the top 10, although overall, the US sector declined by 5%. Wells Fargo is the top bank and JP Morgan has grown by 15% to enter the top 10.
The brand value of European banks fell 7%, more than any other region.
While brand values of banks from established markets, such as the US, Europe, China, and Japan, are predominantly lower or stagnant, many banking brands in emerging markets, especially Southeast Asia, Middle East and Africa, and Latin America, are improving.
David Haigh (pictured), chief executive officer of Brand Finance, said: “The brand performance of established banking markets is a reflection of the fragile global economy and political landscape as well as the expectation of a downturn. But it also represents banks’ ongoing challenge in adapting to increased regulatory and technological change within the industry.”
As established brands continue to see their value eroded, so-called challenger banks are in the ascendancy, he said.
For example, Virgin Money increased brand value by 49% to $0.7 billion while Shawbrook rose by 73% to $0.3 billion.
Other banks with improving brand value included Romania’s Banca Transilvania (up 53%), OTP Bank of Hungary (+33%) and Russia’s VTB Bank (+32%).
Haigh said: “Challenger banks, with their culture of innovation and flexibility, are becoming more of a threat to traditional banks that are losing brand impetus.”
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 500 most valuable banking brands are included in the Brand Finance Banking 500 2020 ranking.
Brand Finance has offices in more than 20 countries and aims to bridge the gap between marketing and finance by quantifying the financial value of brands.
It helped to craft the internationally recognised standard on brand valuation – ISO 10668, which defines a brand as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.