Downturn Stripped Bank Brands Of Value

by Les Luchter, Feb 18, 2009, 2:56 PM

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Just how bad was the financial industry downturn last year?

Market capitalization of the world's top 500 financial services brands dropped $3.9 trillion--or 51%--while brand value fell $218.1 billion, down 32%, according to Brand Finance's third annual Global Banking 500 rankings, compiled in association with The Banker Magazine. The top 100 brands from the previous year lost 84% of all the brand value.

The upheaval in 2008 caused 198 of the brands in the 2007 rankings to disappear from the list entirely. These included the federally bailed-out Fannie Mae and the bankrupted Lehman Brothers.

Merrill Lynch--acquired by Bank of America during the year--fell 30 places, while Wachovia, now owned by Wells Fargo, fell 59 slots.

Only 31 financial firms increased in brand value during the year, with many of them based in China, India, South Korea and Turkey. "Banks from emerging markets," the study said, "seem less exposed to the global financial crisis than established markets."

The number of U.S. brands in the top 500 fell from 124 to 95.

A global presence helped other institutions. UK-based HSBC, for example, remained the top financial brand. While HSBC's value fell 40% to $25.4 billion, the study found that its worldwide status "has buffered its exposure to the credit crisis, spreading risk both globally and across all revenue streams."

Following HSBC, the top ten financial services firms value-wise were:

2. Bank of America, #3 a year earlier

3. Wells Fargo, up from #8

4. Spain's Santander, staying at #4

5. China's ICBC, up 11 spots

6. American Express, down one spot

7. Citi, slipping from #2

8. France's BNP Paribas, down from #7

9. China's Construction Bank, up nine slots

10. Chase, slipping four positions

Breaking the worldwide list down by sectors, HSBC also led in retail banking, followed again by Bank of America and Wells Fargo. In wholesale banking, the leader was JP Morgan, followed by Goldman Sachs, with Morgan Stanley and Prudential also landing in the top 10.

The credit card category was led by American Express, whose brand value more than doubled #2 Visa, but was still half of what it had been a year earlier. Chase was #3, MasterCard #4 and Discover #6, after Barclays.

In the commercial, or corporate, banking sector, Bank of America (#5) was the only U.S. firm in the top 10.

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0 comments on "Downturn Stripped Bank Brands Of Value ".

1. Gray Hammond from BRANDwright Inc.
   

   commented on: February 19, 2009 at 6:09 a.m.

   This is the hazard of tying Brand equity to Market cap and Shareholder value. Brand equity is a composite of Customers, Employees, Innovation, Channels, Marcom & Competitors. Making Brand metrics a function of share price puts the cart before the horse.

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