New Delhi: Indian banks, barring SBI and ICICI Bank, come a cropper in global stage when it comes to their brand value while their counterparts in communist China have fared better, according to the findings of a study.
In a study by London-based consultancy Brand Finance, only two Indian banks, the country’s biggest lender State Bank of India and ICICI Bank, the largest in the private sector, figure among the top 100 global banking brands.
Compared to the Indian brands in top 100, three Chinese banks find a place in the top 25 brands.
“We have seen the emergence of powerful financial institutions from the Chinese market in the top 20 most valuable brands in the sector, indicating significant changes in the global financial market power base,” Brand Finance, an independent brand consultancy said in its latest report.
The report, Global 500 Financial Brands Index, analyses the financial value of the world’s top 500 banking brands. The study incorporates data from the world’s largest 32 stock markets.
According to the study, State Bank of India has a brand value of $2,852 million while for the ICICI Bank it is $2,603 million.
The findings come out at a time when SBI’s proposal to merge its associate banks with itself to attain global scale and size hangs in balance with employees union protesting the plans.
Industrial & Commercial Bank of China has a brand value of of $8,427 million, China Construction Bank is at $7,786 million, Bank of China is at $6,741 million, Bank of Communication $2,664 million. For China Merchants Bank, it is $1,794 million.
Besides Industrial & Commercial Bank of China and China Construction Bank’s brand value represents only a fraction of its market capitalisation (4%), the survey said adding “we expect this value to increase in the medium term as Chinese banks devote more time and resources to building their global brands.”
Chinese banks have emerged as significant players on the global stage. Three Chinese banks now appear as part of the top 25 brands.
Banks that are domiciled in large and rapidly emerging markets such as Brazil, Russia, India and China (BRIC) continue to benefit from the rapid economic growth in their territories, the study said.
Investing in emerging market banks allows for diversification in the ongoing financial crisis. Furthermore, there is a significant growth potential in markets such as China and India where retail banking penetration is very low.
Brazil has three banks among the top 60 brands: Banco Bradesco, Banco do Brasil, and Banco Itau, ranked 42nd, 45th and 53rd respectively, while China has three banks: Industrial & Commercial Bank of China, China Construction Bank and Bank of China, ranked 16th, 18th and 23rd respectively.
Russia has one bank: Sberbank ranked 55th and India’s State Bank of India is ranked 59th.
The sub-prime crisis had considerable influence on this year’s rankings. The crisis has resulted in significantly adjusted expectations of future financial performance, enterprise values and brand values.
As of December 2007, an estimated $80 billion of sub-prime related losses or write-downs had been reported, with Citigroup’s loss accounting for approximately $18 billion, followed by UBS (over $13 billion).
The top five financial brands globally are: HSBC, Citi, Bank of America, Santander Central Hispano and American Express, with a brand value of $35.4 billion, $27.8 billion, $25.4 billion, $20.7 billion and $16.1 billion.