LAGOS— The Banker Magazine, yesterday, released its top 500 global banking brands for 2014 with Nigerian banks ranking very low despite rising profits and assets.
The report said that Nigerian banks still have a long way to go to build their brands.
According to the report, “African banks made little headway. South Africa saw their total brand valuation dip by 4 per cent to $5.7 billion, while Nigeria, despite experiencing a big rise in profits and assets in the past few years, only managed to increase their brand values by three per cent to $593 million, suggesting they still have a long way to go in terms of building their brands.
The brands which ranked banks according to how they manage to enhance shareholders value ranked United States and European banks high for appreciating in shareholders value.
According to The Banker, “Brand valuations for US and European banks once again rose sharply. For emerging market lenders, the ranking looks less encouraging. Brand values in this year’s Top 500 Banking Brands ranking have increased 14 per cent from 2013, reflecting the continuing recovery of global banks from the financial crisis. Among the top 10 banks, eight saw their brand values rise by nine per cent or more.
“Wells Fargo had another strong showing, topping the ranking for the second year in succession. Its brand value went from $26 billion in 2013 to $30 billion in 2014. HSBC moved up from third to second.
Bank of America and Citi also jumped one place from last year to third and fourth, respectively. The bank brand to lose out to HSBC, Bank of America and Citi was Chase, which slipped from second to fifth spot, a result of its brand value declining one per cent to $23.2 billion.
“Overall, developed world lenders had a good year. European institutions fared particularly well, reflecting the fact that their earnings projections and the perception of their riskiness – both important elements of their brand valuation – have improved as the eurozone crisis has abated and with many of them having increased their capital levels and cleansed their balance sheets of bad assets.
“The brand values very much mirror banks’ share prices and market capitalisations,” says Bryn Anderson, chief operating officer of Brand Finance, the consultancy that did the research for the ranking.
Peripheral eurozone countries such as Ireland, Portugal and Greece stood out for positive reasons. The aggregate brand valuation of Greek banks rose a huge 101 per cent between 2013 and 2014 to $2.1 billion. Irish and Portuguese lenders increased by 68 per cent and 42 per cent, respectively. Cyprus, however, is yet to put its financial problems behind it. Its banks saw their collective valuation fall 3 per cent to $231m.
US banks managed to increase their valuations from $174 billion to $194 billion, ensuring that once again the country remained way ahead of any other in the ranking China, in second place, has a total br