Big Chinese Banking Brands Boom By 22%, Study Reveals

The Industrial and Commercial Bank of China (ICBC) at US$59.2 billion and China Construction Bank at US$56.8 billion have taken out 1^st and 2^nd place respectively as the world’s most valuable bank brands for 2018, according to new research by Brand Finance, the world’s leading independent brand valuation and strategy consultancy, published in The Banker magazine. China Construction Bank rose from 3^rd place to 2^nd, overtaking US bank Wells Fargo at US$44.1 billion, which slipped to 3^rd despite itself growing by 6%.

David Haigh, CEO of Brand Finance, commented:

“Globally, the value of the world’s 500 biggest bank brands increased by 10.2% over the last year to US$1.18 trillion, with strong performance in many countries around the world. However, Chinese brands in the Brand Finance Banking 500 league table outperformed the global average with outstanding growth of 22%.”

Brian Caplen, Editor of The Banker, commented:

“While Chinese banks have increased their dominance of the ranking, there have been strong individual performances in both Europe, the US and the rest of Asia. The full ranking appears in the February issue of The Banker and includes a new Islamic finance brand ranking led by Dubai Islamic Bank.”

Chinese Banks Dominate Top 10
The world’s most valuable bank brand, ICBC, was also awarded the highest-possible brand strength rating of AAA+. In the aftermath of the 2008 global financial crisis, ICBC has enjoyed robust growth in the value of its brand, based upon a very strong foundation in the Chinese domestic market. In recent years, its domestic strength has served as a platform for global expansion.

Chinese bank brands dominated the top 10, with the Bank of China benefiting from a 34% increase to its brand value to US$41.8 billion, while the brand value of Agricultural Bank of China grew by 31% to US$37.3 billion. Meanwhile, American bank brands Chase (up 15% to US$38.8 billion) and Bank of America (up 10% to US$33.3 billion) saw good growth, but could not keep up with the booming Chinese bank brand values.

China extended its lead over the USA with the largest aggregate brand value of banks in the global top 500 listing, with Chinese bank brand values growing by 22% over the last year to a combined total of US$317 billion. This growth comes from just 45 Chinese banks, while the USA continues to host the largest number of bank brands in the global top 500 listing, with 76 such brands.

World’s Most Valuable Bank Brands

Bank Brands Under Threat From Technology Competitors
Bank brands may soon face competition from big tech-focused companies such as Apple, Facebook, Google, and Amazon in the broader financial services sector. Each have launched various consumer-facing financial services in recent years, and each brand represents new challenges to traditional banking services, with the tech company brands more aligned to modern customer expectations around instant multi-channel and multi-platform services.

David Haigh, CEO of Brand Finance, commented:

“The big tech companies are already encroaching into areas traditionally supplied by banks such as payments and financing, and are backed by powerful brands. Facebook and Google already have brand strengths that rank above all banks. The big banks have been giants of their industry, with competition traditionally coming from within the banking sector. Now, challenger brands come from outside banking with great customer equity scores.”

Brian Caplen, Editor of The Banker, commented:

“Banks are focusing on their brand strength more than ever. Given the threat from tech companies, which is particularly strong in China, many banks have redoubled their efforts in the digital space combining new tech investments with a marketing strategy aimed at an on-line generation.”

Regional Leaders

Besides ICBC, the world’s only other AAA+ ranked bank brand is Sberbank of Russia. Sberbank is, like ICBC, focused on its domestic market. Recently, Sberbank announced new plans to combat the threat from technology competitors, including a blockchain investment lab. It is likely that Sberbank is well placed to confront these external competitors, with strong brand equity amongst its key stakeholders in Russia.

David Haigh, CEO of Brand Finance, commented:

“Sberbank’s performance this year in both brand value and brand strength has been exemplary. The brand has solidified its pre-eminence in eyes of the Russian populace, scoring exceptionally well in the Brand Finance original consumer equity research that feeds into our valuations. As start-ups and tech ecosystems alike encroach on the financial services industry, Sberbank’s dominance as a brand will provide a solid foundation to adapt and thrive.”

European banks have performed moderately, with growth of 8% in big bank brand value over the last year, slightly below the global growth of 10.2%. The four most valuable bank brands in Europe all suffered mediocre performance, including HSBC (down 12% to US$18.3 billion), Santander (up 2% to US$16.2 billion), BNP Paribas (up 1% to US$13.7 billion), and Barclays (up 4% to US$13.5 billion). This makes Sberbank’s performance (up 28% to US$11.6 billion) in Russia even more remarkable.

In the Middle East, QNB saw its brand value grow 11% year on year to US$4.2 billion, defending its title as the Middle East’s most valuable banking brand despite geopolitical challenges throughout the region. QNB consolidated acquisitions and continued to expand in international markets, both in in the Middle East and South East Asia.

David Haigh, CEO of Brand Finance, commented:

“Amidst trying times for the reputation of the banking industry as a whole, QNB manages not only to attract customers in new markets such as South East Asia, but also to solidify its image among the existing customer base.”

World’s Most Valuable Bank Brands by Country