Standard Bank has been named Africa’s most valuable banking brand following a 26% increase in brand value to US$1.583 billion, according to the latest report by Brand Finance published in The Banker magazine.
Standard Bank’s impressive increase saw it inch ahead of its South African compatriot, First National Bank (brand value up 18% to US$1.581 billion), to claim the title with a margin of just US$2 million.
Every year, brand valuation consultancy Brand Finance puts 5,000 of the biggest brands to the test and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s top 500 most valuable and strongest banking brands are included in the annual Brand Finance Banking 500 ranking.
Overall, there are 20 African brands in the ranking, with South Africa dominating the African continent with seven brands featuring – six of which sit at the top of the continental ranking with ABSA (US$1.437 billion), Nedbank (US$1.018 billion), Investec (US$992 million), and Capitec Bank (US$625 million) joining Standard Bank and First National bank at the top. Outside of South Africa, Nigeria boasts five brands in the ranking with Access Bank (US$379 million) the nation’s most valuable, Egypt and Morocco each have three, and Kenya has two.
Declan Ahern, Valuation Director at Brand Finance, commented: “Standard Bank’s impressive performance comes off the back of hard work over the past few years, with the brand’s reputation steadily increasing since 2019. The new brand positioning “It can be” announced mid-way through 2020, alongside continued diversification and adaptability, have clearly paid dividends. Overall, the performance of African brands has been overwhelmingly positive across the board this year, and highlights the impressive strides made by brands from the continent in recent years.”
Brand value of world’s largest banks grows for the first time in three years
Looking at the ranking from a global perspective, the world’s top 500 banking brands have turned the tide on brand value contraction for the first time in three years, observing a 9% year-on-year brand value growth to reach an all-time high of US$1.38 trillion
The brand value of the world’s largest banks shrunk by 2% by the beginning of 2020 (US$1.33 trillion) and a further 4% by 2021 (US$1.27 trillion). Initially caused by economic uncertainty and interest rate movements, the situation was exacerbated by the pandemic, which saw profit and interest rates take a hit.
However, as nations continued to adapt to COVID-19 and economies rebounded over the past year, loan loss provisions were much less significant than initially forecasted by industry experts. Furthermore, improved digitalization by banking brands, coupled with strong government intervention and economic recovery around the world resulted in a higher than expected industry profitability in 2021.
While this year’s overall brand value growth is undoubtedly a positive sign for the industry, it signifies a meager 2% increase from US$1.36 trillion, which was the combined pre-pandemic brand value of the world’s top 500 banking brands in 2019. Particularly in Europe, banks are still feeling the effects of COVID-19, where weak profits are not helped by cost inefficiency and insufficient investments in digital technology.
David Haigh, Chairman & CEO of Brand Finance, commented: “As banks continue to battle the fallout from the COVID-19 pandemic, the importance of a solid brand is more significant than ever. Banking products are becoming more commoditized, and banks will need to continue differentiating themselves from other competitors in the market, through the use of their brand, particularly in the face of an emerging threat from challenger brands and decentralized finance in the future.”
“Many of the world’s largest banking brands have come through the worst of the pandemic stronger – a testament to the role they have played in supporting the real economy through the past 12 months,” said Joy Macknight, editor of The Banker. “Banks’ digital transformation efforts over recent years meant they were able to respond faster to client needs, as well as deliver new products and services, which has boosted banks’ reputations in the eyes of their retail and corporate customers.”
30 newcomers have joined the Brand Finance Banking 500 2022 ranking this year, including two African new entrants – Kenyan Equity Group (338th, brand value US$388 million) and Morocco’s Bank of Africa (466th, brand value US$200 million).
Equity Group has joined another Kenyan bank in the ranking – Kenya Commercial Bank (366th, brand value US$338 million), which itself saw an impressive 61% brand value increase this year. The growth in brand value of Kenyan banks is the result of their strong performance in Brand Finance’s original market research, which was introduced in the country for the first time this year. High scores from the consumer survey have boosted the overall brand strength evaluation of the Kenyan brands, which in turn has boosted their brand value.
Of all new entrants across all countries, with an eyewatering brand value increase of 181%, Cadence Bank has entered the ranking as the fastest-growing brand of 2022, reaching a brand value of US$403 million. The US-based bank has recently entered into a merger agreement with BancorpSouth Bank, which held a brand value of US$266 million in the 2021 iteration of the Brand Finance Banking 500 ranking. As part of the agreement, BancorpSouth has rebranded to Cadence Bank. The merger aims to provide more customer and relationship-focused financial services to Cadence Bank’s extensive customer base across the southern US.
South Africa’s Capitec Bank has claimed the spot of the second strongest brand in the Brand Finance Banking 500 2022 ranking, boasting a BSI score of 92.4 out of 100 and a corresponding AAA+ brand strength rating. Despite having only been around for 22 years, Capitec Bank has already overtaken many of South Africa’s traditional banks, becoming the second-largest bank by market cap.
The brand continues to position itself as the nation’s leading retail franchise, delivering a low-cost alternative to traditional banks and has already built a strong, loyal customer base. This helped boost Capitec Bank’s rank as 6th in the world for familiarity, 3rd for its quality of services, and it was noted as the 5th easiest bank to deal with. As the brand continues to uphold a customer-centric business model focused on providing low costs and high-interest rates on deposits, it remains poised for further success.