BEIJING: The combined value of Chinese banks has surpassed that of US banks for the first time as they emerged as global leaders by asset base as well as brand value, a report by a business valuation consultancy has said. The report by the London-based Brand Finance Banking 500 places Industrial and Commercial Bank of China as the world’s most valuable bank, with a brand value worth $47.8 billion, representing a 32% year-on-year growth, PTI reported. Marketing investment and the brand’s credibility with customers, staff and shareholders, among other factors are taken into consideration in calculating the brand value.
The report said Chinese banks have an aggregate total brand value of $258 billion, accounting for 24% of the total brand value of the top 500 global banks, compared with 23% for US banks, state-run China Daily quoted the report as saying. Zhou Jingtong, division head and professor at Bank of China’s Institute of International Finance, said: “The brand value growth of Chinese banks is closely related to the continuous rise of China’s contribution to the global economy.” “During the process, the Chinese banking industry maintained steady development in various aspects, including asset growth, asset quality, provision coverage ratio and capital adequacy ratio.” The internationalization of Chinese banks, particularly in recent years, also contributed to their brand value growth, he said. Brand Finance’s CEO David Haigh, said: “Chinese banks are being carried along in the slipstream of industrial giants as they grow and expand into international markets. Facilitating international deals boosts revenues, but more importantly, enables the banks to build their reputations with potential clients across the world.”
Marketing investment and the brand’s credibility with customers, staff and shareholders, among other factors, are all taken into consideration in calculating brand value. Essentially, the ranking rates how a bank’s soft values translate into performance. The report also shows Chinese banks as having an aggregate total brand value of $258 billion, accounting for 24% of the total brand value of the top 500 global banks, in comparison to 23% of aggregate US banks. In addition to the Industrial and Commercial Bank of China, the China Construction Bank and Bank of China also showed rapid brand value growth of 17% and 13% respectively. The success of the Chinese banks came at the expense of US banks, such as Wells Fargo, which once topped this list. Wells Fargo’s fake account scandal, which led to court fines in 2016, contributed to a 6% fall in brand value to $41.6 billion.
