DBS, OCBC see jump in brand value

DBS and OCBC have improved their global brand ranking among lenders in the world with double-digit growth, a study by Brand Finance has found. UOB, however, experienced tepid growth and saw a fall in its global ranking.

According to the annual Top 500 Banking Brands ranking, the three local banks collectively have the greatest brand value of any Asean country, with a total brand value of US$8.5 billion.

Brand valuation agency Brand Finance calculated brand value by examining the royalties which a company would have had to pay to license its brand if the firm did not already own it. This form of calculation for intangible assets is known as the "royalty relief" method.

DBS is ahead of its local peers with a brand value of US$4 billion this year, up 15.4 per cent from a year earlier. It is ranked 54th place among 500 global banks this year, up four positions from 58th place previously.

DBS also took pole position among all Asean banks in terms of brand value, maintaining its top spot last year.

OCBC came in second with a brand value of US$2.3 billion, a 35.7 per cent jump over the previous year. It is ranked 81st globally, rising several notches from 102nd position in 2013.

UOB registered a much smaller growth in brand value this year, at US$2.2 billion, a 3.3 per cent year-on-year increase.

UOB also fell two spots to 89th position globally.

Samir Dixit, managing director of Brand Finance Asia Pacific, said the strength of these bank brands will be tested this year amid earning risks in the region.

"Constant downgrades to GDP estimates, coupled with the slowdown in mortgages, will likely create some business downside in the next few quarters," he warned.

"That is where a strong brand will play a significant role to help retain customers, reduce churn, build customer confidence and improve profitability".

Wells Fargo remains the world's most valuable bank brand, with a brand value this year of just over US$30 billion, up 16.1 per cent over the previous year. It is followed by HSBC, with a brand value of US$26.9 billion, up 17.5 per cent year on year.

Wells Fargo overtook JP Morgan to become America's biggest bank by profitability last year. It has also enjoyed "a more favourable reputation" than its peers, Brand Finance noted. This is on the back of Wells Fargo's strength in traditional banking, and a perceived distance from Wall Street.

Of the top 10 banks with the highest brand value, just three are from Asia, and specifically, China. ICBC stands at sixth spot, China Construction Bank is ninth, and Agricultural Bank Of China edged into the top 10 list this year, moving up one spot from 11th in 2013.