The battle of the banking brands
SA banks are by far the continent’s most valuable banking brands, according to the latest Brand Finance rankings. China dominates the world rankings, but there are interesting regional trends, not least in SA, with new entrants challenging traditional banks
SA banking brands have come up trumps in Africa in the Brand Finance Banking 500 2019 value ranking, though China’s major banks dominate the global top spots. Seven of the top 10 places for the continent are SA banks, with Capitec first and FNB a close second.
Brand valuation and strategy consultancy Brand Finance, which has offices in over 20 countries, values the world’s biggest brands each year. Its report on the ranking of the 500 most valuable banking brands is published by The Banker magazine.
Brand Finance Africa MD Jeremy Sampson says: "The strength of the banking sector underlines why SA remains the gateway to Africa, with banks jostling for top positions."
The combined value of SA banking brands in the rankings is more than $8bn, almost eight times the total of the next country on the continent, Nigeria.
SA accounts for eight of the 18 banking brands in the ranking, followed by four from Nigeria, three from Egypt and three from Morocco.
"The competition is on," says Sampson. "This year could turn out to be one of the most eventful in the banking sector, as we have new entrants lining up to join the fray and the top brands are planning their responses."
In addition to putting a financial value on brands, Brand Finance also assesses brand strength, using its brand strength index (BSI) methodology. The 0-100 index is based on a scorecard that measures marketing investment, stakeholder equity and business performance.
The strongest brand on the continent is Capitec, which has a BSI score of 88.7, with FNB closing in.
The report finds that Chinese banks continue to consolidate their global brand presence. ICBC, which has a 20% stake in Standard Bank of SA, is the world’s most valuable banking brand ($79.8bn). China’s banks dominate the top four spots in the 2019 ranking.
The country’s banks grew 28%, achieving $407bn in total brand value — $100bn more than US banks.
All US banks, with the exception of Wells Fargo (-9%), Chase (-7%) and BankUnited (-6%), improved their brand value.
Islamic banking showed a 20% boost, led by Middle Eastern banks.
Regarding brand strength, Sberbank of Russia claimed the title of the world’s strongest, with a score of 93.1 out of 100 and an AAA+ rating.
The growth of European banks was pedestrian; German banks lost 24% of their value. The UK banking landscape, with the added complication and long-term uncertainty regarding its exit from the EU, was stagnant.
In the Middle East, Qatar’s QNB is the leading bank by brand value, rising 19% to $5bn. Emirates NBD increased 14% to $4bn and First Abu Dhabi, the fastest-growing of the region’s banks, rose 25% to $3.9bn.