As a large number of banks across the globe see the value of their
brand slip for a second consecutive year, many financial institutions
are seeing both positive and negative results of being associated with
their country of origin, something that has worked out particularly well
for Canadian banks.
Many banks have seen their brand value decrease in 2011’s Top 500
Banking Brands ranking, with the poor performance of many banks relating
to the woes in the wider economy. This year's rankings show how events
in a bank’s home country can affect how well a brand performs, with a
bank’s country of origin either being a help or a hindrance to the
bank’s branding strategy.Editor's choice
Banks' brands have obviously taken a hit because of the effects of the financial crisis, and the reputation of banks in general is still suffering. “The ones that have maintained their reputation can be characterised by country,” says Mr Haigh. He notes that Singapore, Canada, Australia and China have emerged as countries with strong financial services brands. Mr Haigh says that before the financial crisis, banks from Scotland, Switzerland and the US were considered to have the best reputations, but that is no longer the case.
Go Canada
Canadian banks have performed noticeably well, with the country ranking fourth in the table of brand value by country of origin, and TD, Scotiabank, CIBC, Royal Bank of Canada and Bank of Montreal all featuring in the table showing the largest increases in brand value over the past year. The relatively strong performance of Canadian banks offers them an opportunity to capitalise on the success of their home market in their branding strategy.
Naturally, brand fit is an important factor when [TD is] considering any acquisition. Our goal is to ensure our brand stands for the same things all over the world, and is consistent wherever we operate, while recognising the unique characteristics of local communities
When asked to what degree having ‘Canada’ in the bank’s name is relevant, Mr Little describes his strategy as one of “tactical opportunism”, where the use of Canada can be dialled up or down. He explains that five years ago, the ‘Canada’ in RBC’s branding strategy was not as relevant. Now, however, it is being emphasised. In some campaigns, the bank may switch to the use of ‘Royal Bank of Canada’ rather than ‘RBC'. Also the word ‘Canada’ may be mentioned more often, and may be given a larger type size. For international campaigns, however, the effect could be more subtle with the use of Canadian imagery, for example. In terms of emphasising the bank’s country of origin, Mr Little argues: “It is not a patriotic conversation, it is a marketing conversation.”
International challenge
For other Canadian banks, the country of origin does not feature so heavily in branding. TD, which has climbed up the brand rankings from number 31 to number 21, is also an international brand. When asked how relevant the bank's Canadian origins are to its brand, TD Bank Group's chief marketing officer Dominic Mercuri says: “We feel our brand value is enhanced by the fact that TD is a Canadian-based bank.”
TD has expanded in the US market in recent years, following the acquisition of Commerce Bank. Mr Mercuri explains how the brand fits with the bank’s expansion: “Naturally, brand fit is an important factor when we’re considering any acquisition. Our goal is to ensure our brand stands for the same things all over the world, and is consistent wherever we operate, while recognising the unique characteristics of local communities.”
TD’s foray into foreign markets has presented branding challenges for the bank. Similarly Santander – which originates in Spain – has had to incorporate its international acquisitions into its branding strategy. While the crisis in the eurozone is affecting the financial performance and brand value of many banks that originate in Europe, Santander has performed well compared to its Spanish peers, bolstered by the fact that it is an international brand. Fourth in the Top 500 Banking Brands ranking, Santander has remained in the same place as in 2010, but has seen decline in its brand value from $26.15bn in 2011 to $19.97bn in 2012.
With TD and Santander it is not necessarily obvious where the bank originates. For Bank of America, however, it is hard to ignore where the brand is from given that its country of origin is in the brand name. When asked whether having ‘America’ in the bank’s branding makes it more difficult to become an international brand, Anne Finucane, global strategy and marketing officer at Bank of America, says: “Our brand and position as a US company gives us tremendous value and flexibility internationally. While in some geographies having ‘America’ in the name could be perceived as a challenge, we have learned that there are many positive and universal values about America that our clients around the world relate to."
Branding pioneers
Another US brand that has performed well in the brand rankings is Wells Fargo, which has remained in second place. Like many of the banks in the ranking this year, Wells Fargo has seen a drop in its overall brand value, falling from $28.94bn to $23.23bn. While the brand and name is not explicitly American, the brand positioning does align itself with its country of origin.
Jamie Moldafsky, chief marketing officer at Wells Fargo, says that the brand has a unique place in US history: “It is not just that Wells Fargo was founded in America, it is part of American history,” she says. She explains that Wells Fargo's stagecoach logo has a role to play in creating a different feeling toward the brand: “It is the history and the lore that really differentiates us,” she says, adding that the brand carries associations of those who helped pioneer the US.
These brand perceptions are associated with the bank’s country of origin. For HSBC, the situation is different as the brand has associations with Asia – with the Hongkong Shanghai Banking Corporation being its original name – even though the bank is domiciled in the UK. Chris Clark, global head of marketing at HSBC, points out that Asian imagery is still used in marketing campaigns. HSBC is very much an international brand and the fact that it was originated in the UK is not reflected in its brand. What it means to be an international brand, however, has changed in recent years. The bank has now dropped its tagline of “the world’s local bank” – even though consumers may not have noticed – as the bank has redefined its global strategy.
“‘The world’s local bank’ was used when our business was ubiquitous, when all product lines were balanced and focused around the retail business,” says Mr Clark. Now the bank is keen to emphasise that its strategy is much more than being a retail bank. Although he argues that 'the world’s local bank' has run its course, Mr Clark is not worried if consumers continue to think that the tagline is still part of the HSBC brand. The brand has now been repositioned as the bank has revised its strategy to adapt to the changing world.
Valuing intangible assets is often a topic for heated debate, and valuing brands is no different. There are numerous ways of calculating brand value, but Brand Finance – the company that has compiled these rankings – uses a method that is recognised by courts and tax authorities.
Unlike The Banker 's Top 1000 World Banks, these tables list the brands and not the name of the bank. The valuations of the brands take into account data on the whole financial group. For example, the listing of TD values the TD brand, and uses data from TD Bank Group. Likewise, the valuation of the Shinhan brand has been assessed based on the data from Shinhan Financial Group.
The brand-specific financial data has also been broken down into different streams, such as product lines and geographical regions, which are displayed in the top 10 tables.
In the case of a financial group owning more than one brand, brands have been split out and listed separately with a valuation of their own. For example, NatWest is listed separately from RBS, and JPMorgan and Chase are also listed separately because they function as separate brands that have their own value.
In the case of Bank of America and Merrill Lynch, however, the brands are not listed separately. The value of Merrill Lynch is included in the brand value of Bank of America, but it is not listed separately in the rankings because it no longer operates as a standalone brand. The brand listing for Bank of America is a portfolio valuation and includes a valuation of Bank of America-Merrill Lynch. The same principle also applies to BNP Paribas and Fortis
The numerous acquisitions that occurred in the wake of the financial crisis have also had an impact on the domicile of the brands. Some banks are now owned by companies that are incorporated in foreign countries and so those banks have a domicile that is different from the country they are associated with. For example, HypoVereinsbank in 83rd place, which is typically thought of as a German institution, is now listed as being domiciled in Italy because it is owned by UniCredit Group.
Brand Finance uses a royalty relief method that values the brand based on what would be paid to use the brand if it were owned by a third party.
Additionally, Brand Finance has given each of the brands a rating, ranging from AAA to D, which benchmarks the strength, risk and potential of a brand, relative to its competitors.
All brand values in these listings are for the year ending December 31, 2011.
For full results, please see:
The Top 500 Banking Brands is the ranking of the most valuable brands in banking conducted by Brand Finance. This annual report pits the best global banking brands against one another in the most definitive list of banking brand values available.
To find out more about the league table valuation and methodology, please call +44 (0)207 389 9400 or email info@brandfinance.com
http://www.thebanker.com/
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