Brand Finance Global Banking Brand Survey Reveals Rise In Islamic Banking

Feb. 1, 2010 - PRLog -- BRANDFINANCE® GLOBAL BANKING 500 SHOWS:

•   78% GROWTH IN BRAND VALUE OF MIDDLE EAST BANKING SECTOR

•   CONVENTIONAL BANKS NURSES LOSSES OF MORE THAN $400BN IN RECESSION – ISLAMIC BANKS EMERGE VIRTUALLY UNSCATHED

•   HSBC WORLD’S LEADING BANK BRAND FOR 3RD YEAR IN A ROW

•   SANTANDER IS WORLD’S FASTEST GROWING RETAIL BANK BRAND


The growth in Islamic Finance as an alternative to traditional Western banking methods, both within Muslim countries and elsewhere, has contributed to a 78% growth in the brand value of the Middle East banking sector, according to the fourth edition of the BrandFinance® Global Banking 500 – an annual review of the top banking brands in the world published in conjunction with The Banker.

The Middle East contributed 2% to total global brand value. During the global crisis, while conventional banks nursed losses of more than $400 billion, Islamic banks emerged virtually unscathed.

According to the report, , which measures companies by both brand strength and brand value as of 31st December 2009, the banking sector has begun to show tangible signs of recovery, with the world’s 500 most valuable banking groups growing by 62% in terms of market capitalisation and their brand values cumulatively increasing by 49%.

Almost all of the banks in the Middle Eastern top ten banks saw an increase in their brand values with as much as 100% increases as a direct result of reduced risk in the economy. Additionally, the region contributed six new brands to the Top 500. Emirate NBD has risen to the top of the Middle Eastern rankings. The two largest Islamic banks in the Gulf region (by market capitalisation)  – Al Rajhi Bank and Kuwait Finance House – have experienced differing performance with regard to their brand values over the last year, with the former almost doubling its brand value and the latter experiencing a slight fall in value.

The only ‘foreign’ bank that has a significant exposure in the Middle East is Standard Chartered, which has subsidiaries reporting Shariah compliant assets.

“Investors that suffered from the credit crisis sought the comfort of stricter lending rules imposed by Islamic law,” explains David Haigh, CEO of Brand Finance plc.

“It will be interesting to see if other big international banks will begin to offer Islamic banking services in 2010 and try to make inroads in the Middle Eastern market in addition to providing their existing customers with greater choice,” he adds.

In the report, HSBC retains its place as the most valuable banking brand in the world for the third year in a row, increasing in brand value by 12% to US$28.5bn. Bank of America, the second most valuable global banking brand increased in brand value by 24% to US$26.1bn. However, smaller US brands showed much higher percentage increases than Bank of America including Goldman Sachs, Chase and JP Morgan (106%, 53% and 45% respectively)

Santander is the world’s fastest growing retail bank brand, coming third overall in the Top 500. The Spanish banking group saw its brand value rise by US$14.8bn, an increase of 136% to US$25.6bn. A significant factor in the growth in Santander’s brand value has been the consolidation of Abbey, Alliance & Leicester and Bradford & Bingley brands under the Santander brand.

The South American region experienced the highest growth in brand value increasing by 84%. This is a reflection of the resilient performance in the region, particularly in the Brazilian banking market.

US dominance of the global banking industry has declined with a decrease in the number of US banks in the Global Top 500 down from 95 in 2008 to 85 in 2009. Although US bank brands recovered during 2009 the overall increase in brand value was only 29%.

Asian markets continue to do well but grew by only 31% in brand value because Japanese brand values declined by 3% reflecting the continued instability of the Japanese market. By contrast India and China saw brand value growth by 137% and 58% respectively.  

2009 is also the first year that a Russian bank – Sberbank – has made the Top 20 (No.15), with significant growth of 160% on the previous year, bringing its market capitalisation to US$51.1bn and its brand value to US$11.7bn.


Ends.

Media Information:

Teamspirit Public Relations
Howard Robinson, Scott Learmouth or Ursula Delaney
T:  020 7360 7878
M:  07702 153537 (Howard);
E:   hrobinson@teamspiritpr.com; slearmouth@teamspiritpr.com; udelaney@teamspiritpr.com

Notes For Editors

First published in 2006, The BrandFinance® Global Banking 500 was the first publicly available study analyzing the financial value of the world’s top 100 banking brands. For the third year in succession, the analysis has been extended to the world’s Top 500 banking brands. It is published annually and incorporates data from all listed companies globally. Each brand is accorded a brand rating: a benchmarking study of the strength, risk and future potential of a brand relative to its competitor set as well as a brand value: a summary measure of the financial strength of the brand.

About Brand Finance

Brand Finance is an independent global business focused on advising strongly branded organisations on how to maximise value through effective management of their brands and intangible assets. Since it was founded in 1996, Brand Finance has performed thousands of branded business, brand and intangible asset valuations worth trillions of dollars.

Its clients include international brand owners, tax authorities, IP lawyers and investment banks. Its work is frequently peer-reviewed by the big four audit practices and its reports have been accepted by various regulatory bodies, including the UK Takeover Panel.

Brand Finance is headquartered in London and has a network of international offices in Amsterdam, Athens, Bangalore, Barcelona, Cape Town, Colombo, Dubai, Geneva, Helsinki, Hong Kong, Istanbul, Lisbon, Madrid, Moscow, New York, Paris, Sao Paulo, Sydney, Singapore, Toronto and Zagreb.