The global pandemic has taken its toll on brand value in the global banking industry, with the total valuation of The Banker/Brand Finance’s Top 500 Banking Brands 2021 ranking falling by 4.2%, to $1.27tn. This is the first time in the ranking’s 15-year history that there have been two consecutive years of decline.

All five regions experienced drops in brand value year-on-year. Central and south America saw the biggest contraction (-19.6%), followed by Africa (-13.7%) and Europe (-11.0%). Asia-Pacific’s total value shrank by just 0.8% to $600bn, which is still more than North America and Europe combined.

The Covid-19 pandemic has affected overall brand value in two ways, says Declan Ahern, valuations director at Brand Finance, which produces the ranking for The Banker. First, many banks have raised large loan-loss provisions to account for expected defaults resulting from government directives to allow temporary loan holidays for bank customers, as well as the issuance of further loans to potentially riskier customers.

“In the short to medium term, this has greatly reduced the profitability of many banking brands. Therefore, many equity analysts are more bearish when forecasting the banking industry’s net revenue and profitability growth,” Mr Ahern explains.

Second, interest rates have remained at record low levels and some have been reduced further by central banks to provide support for businesses and consumers. “This places further pressures on the profitability of banking brands,” he adds.

However, it is not all bad news. In many markets, overall brand awareness for banks has increased marginally, Mr Ahern reports. “This is to be expected as the banking industry is at the forefront of combatting the impact of Covid-19. Many banks have launched clever large-scale advertising campaigns to further communicate how they have specifically helped their customers in dealing with the repercussions of the pandemic,” he says.

Top brands: 2007 vs 2021

China remains at the top of the country league table in 2021 for the fifth year running, making up almost a third of the world’s banking brand value with 51 banks included in the ranking. However, the nation that saw double-digit growth over the past decade has increased its aggregate brand value by just 1% for the second year in a row.

While the US remains in second place in the country table, its hope of regaining the top spot is fading as the gap between the two countries widens year-on-year. In 2021, the aggregate brand value of the 74 US banks in the top 500 shrank by 2%.

When The Banker began publishing the ranking in 2007, there were no Chinese banks in the top 100 (as it was then), let alone the top 10, which was dominated by US and European brands. Citi was the most powerful banking brand in the world, with a valuation of $35.1bn, followed by HSBC and Bank of America (BofA). At that time, the US far outstripped other countries, with 26 banks in the top 100 comprising 42% of global value.

Now it is the Chinese brands, led by Industrial and Commercial Bank of China (ICBC) with a brand valuation of $72.8bn, that dominate the ranking. In this year’s top 100 there are 21 Chinese banking brands, accounting for 39% of total brand value; the US, on the other hand, has 19 banks that contribute 24% of global value.

In 2007, the aggregate brand value of the top 100 banks was $484.8bn; today, that figure has more than doubled to $996.3bn. Unsurprisingly, the global banking industry faced the biggest plummet in value during the global financial crisis (GFC): a third of the top 100 brand value was wiped out in 2009. Many brands were subsumed through mergers and acquisitions, including Wachovia (Wells Fargo), Bank of Scotland (Lloyds Banking Group) and Fortis (BNP Paribas). Others have disappeared completely, such as Lehman Brothers.

Clearly, the Covid-19 crisis has not affected the industry’s brand value as severely as during the GFC. “In 2009, we saw how banking brands, as primary contributors to the GFC, suffered huge reputational losses,” Mr Ahern says. “However, now we have seen banking brands playing a significant role in helping businesses and consumers overcome the effects of the virus, distributing government-mandated funds, extending credit, reducing fees and being considerate to customers.

ICBC: top for a fifth year

The Chinese banking industry began 2020 in relatively good health, according to Mr Ahern, enabling it to effectively deal with the negative economic impact of the virus. “Additionally, investment in digitisation, and the acceleration of the digital development as a result of the virus, has enabled Chinese banks to engage with customers with relatively little disruption,” he says.

Impressively, two-thirds of the Chinese banks in the top 500 ranking increased their brand value over the past 12 months. However, the country’s four megabanks – ICBC, China Construction Bank (CCB), Agricultural Bank of China and Bank of China – saw drops in brand value. This did nothing to shift their entrenched positions at the top of the ranking. ICBC, for example, has held the number one position for the past five years and remains well ahead of its compatriot CCB in second place.

In 2020, ICBC used its brand communication to assist in its strategic business development, including expanding its ‘No.1 Personal Bank’ strategy. “By establishing the personal financial business brand system and successfully holding the ‘Share a Better Future with Intelligence and Sincerity’ launch event, ICBC became the first commercial bank in the Chinese banking industry to launch a brand system and implement strategy-based brand building, which was widely praised by the industry,” says a spokesperson from ICBC’s brand management department.

The bank also guided its professional lines, branches and institutions to increase efforts in marketing and publicity, and interpreted “service+, intelligent+, scenario+, safe+” from multiple perspectives. ICBC achieved an “energy-level leap” in personal financial business brand awareness and influence, according to the spokesperson.

Since the outbreak of Covid-19, ICBC has concentrated its brand campaigns on the fight against the pandemic. “First, in news communication, with speedy, powerful and warm reports, ICBC injected positive energy to society, reflecting the good spirit of its cadres and employees, which was praised by both employees and the general public,” says the spokesperson.

“Second, in brand planning, ICBC planned four major theme campaigns – ‘Reminder’, ‘Action’, ‘Tribute’ and ‘Spring Series’ – to demonstrate its mission and responsibility as a large bank to draw on the strength of the whole bank to fight the pandemic and fully support resumption of work and production,” the spokesperson continues. “The foregoing campaigns have effectively spread ICBC’s good image as a bank that pays attention to the interests of the whole, embraces responsibility with passion and provides excellent services.”

BofA jumps in front

The most powerful US brand in 2021 is BofA, which moved up one place to fifth in the global ranking. Despite a 7% drop in brand value, BofA clinched the US top spot from Wells Fargo, which fell two positions due to a 22% contraction, and stayed one step ahead of Citi, which also saw a small dip in brand value.

BofA builds on its 2019 rebranding exercise that simplified, modernised and humanised its market messaging. This messaging rang true during the pandemic. “As a company, we understood the importance of staying connected to our employees, clients and communities during this time. Recognising the vastly changing dynamics, we built an internal research practice dedicated specifically to understanding our clients’ mindset in the current environment,” says Meredith Verdone, chief marketing officer (CMO) at BofA.

The bank also continues to leverage its client advisory panel to better understand sentiment, needs and concerns. Through this process, it learned that clients were seeking convenience, guidance and transparency. “We shaped our communications accordingly, delivering the education, tools and resources they needed,” she adds.

Initially, BofA focused its efforts around digital and mobile capabilities, for example Zelle and mobile cheque deposit capabilities. The bank also enhanced its virtual financial assistant, Erica, to understand coronavirus-related terms, questions and requests. “We saw a marked increase in digital and mobile usage across our client base, even with those who had not previously adopted the bank’s technology offerings,” Ms Verdone says, reporting that nearly 60% of the bank’s 65 million clients are digitally active today.

In addition to national campaigns, she reports that BofA delivered “hyper-local” and relevant communications using market-specific messages, facts, data and demonstrations. “In most of our channels and creative executions, we featured the voice of our market presidents, who are our leaders on the ground in our 92 markets across the US. They were regularly on the air on local radio stations and our newspaper ads were personally signed off by them,” she adds.

A new US brand

US banking group Truist premiers in the top 500 this year, following the merger of BB&T and SunTrust at the end of 2019. It is the highest new entrant in the ranking, in 36th place. Rebranding following a merger is challenging at the best of times, but doing so successfully during a pandemic is impressive.

“With any rebranding, driving awareness and executing with excellence are table-stakes,” says Truist CMO Vinoo Vijay. “What we are incrementally focused on is using this moment to create genuinely better ways to serve our clients and communities. We are using the best of today’s technology, and marrying it with our deep belief in the power of human connections, to reimagine our banking experiences.”

The bank ran several successful advertising campaigns in 2020, including ‘Main Street Love’, a Covid-19 focused campaign highlighting small business recovery during the pandemic; and the ‘United we win’ campaign in partnership with United Way Worldwide. “The latter gave voice to America’s first National Youth Poet Laureate, 22-year old Amanda Gorman, and focused on reimagining our communities where unity is celebrated,” he says.

Mr Vijay says that the coronavirus pandemic put the bank’s innovation plans on the fast track. “We uncovered new ways to connect with our clients with increased speed and agility to deliver on our brand purpose. We moved swiftly to leverage existing content, create new content and make a number of tech improvements to meet client and community needs,” he says.

“The collaboration and Herculean efforts of the teams seemed to happen at warp speed,” he adds, reporting that the launch of the initial Covid-19 page on Truist.com happened in just five hours.

Challenger success

Swedish challenger bank Klarna Bank, which received its full banking licence from the Swedish Financial Supervisory Authority in 2017, enters the top 500 ranking for the first time in 2021 at 269th position. What is the secret to its success?

“At Klarna we believe that an engaging brand combined with superior products with ubiquity to customers is critical to our continued rapid growth,” explains David Sandström, CMO at Klarna. “Our brand is a key factor in outperforming the competition, and therefore we leverage the brand not only through brand campaigns but in everything we do, from product to culture.”

Klarna’s success formula includes tapping into pop culture with campaigns featuring Snoop Dogg and Lady Gaga, for example. Additionally, as the bank continues to enter new markets with different dynamics and prerequisites, it has created several bespoke brand campaigns in the various regions. “We have engaged particular passion communities, like sneakerheads or gamers, that resonate with the kind of products and features we offer,” says Mr Sandström.

“These targeted campaigns – where we typically invite our merchants or partners to join through co-marketing – generate an organic halo effect earning media mentions and social sharing to extend the reach beyond the sponsored media investments, driving awareness of the Klarna brand.”

Overall, the Covid-19 pandemic did not have a big impact on Klarna’s marketing campaigns, as it offers products and services that make online shopping and personal banking smoother for consumers. “At the end of the day, Klarna exists for people and to help them in their everyday lives,” says Mr Sandström. “Going forward, we believe that consumers will have an appetite for – and expect – more excitement and uplifting storytelling, which is something we will infuse into our communication.”

UK’s OneSavings Bank shines

With Brexit lingering in the background, the UK saw a 15% decline in aggregate brand value over the course of 2020. While HSBC remains the most powerful UK brand, in 11th place in the global ranking, it was OneSavings Bank (OSB), a specialist lender focused on underserved sub-sectors of the mortgage market, that came up trumps. OSB is one of only three UK banks that have increased their brand value over the course of 2020 and recorded the greatest increase (26%).

Following OSB’s merger with Charter Court Financial Services in 2019, which joined Kent Reliance for Intermediaries (KRFI), Precise Mortgages and InterBay Commercial as its primary brands, the marketing goal was to expand the awareness and understanding of each brand among brokers, its primary channel of distribution, according to Roselle Allsop, group head of marketing – lending at OSB.

“We wanted to increase new broker relationships and maximise value from existing brokers,” she explains. “This was achieved through a multi-brand strategy with a series of complementary brand campaigns built around a clear meaningful purpose. The Precise Mortgages ‘specialist lending solutions’ campaign and brand were highlighted in external research as achieving outstanding levels of brand recognition compared with other lenders within the same space.”

While the outlook for the specialist lending marketing was hard to predict during the Covid-19 pandemic, Ms Allsop says: “It was apparent that the lending brands each needed to instil confidence and support to the main mortgage broker audience while maintaining a course of choice through differentiation. For example, KRFI adopted specific campaigns designed to empathise with brokers and their clients, provide flexible channels of communication and to promote the importance of mental health by inviting brokers to nominate their loyal companions during challenging times.” She reports that the campaign generated positive responses on social media channels that “encouraged solidarity, interaction and positivity”.

CIB rejoins African top 10

The African regional table remains dominated by the large South African banking brands, with First National Bank holding the most valuable regional brand title for the fourth year in a row. While there is limited movement at the top of the African table, however, there is more competition in the bottom half. Commercial International Bank – Egypt (CIB), for example, increased its brand value by 19%, the greatest rise among the top 10 African banks, and rejoined this exclusive club after a three-year absence.

CIB’s brand success can be attributed to the bank’s 7000 employees acting as brand ambassadors, says chief communications officer Sherif Khalil. “Our approach is to be very forthcoming and transparent with all our employees. This provides the trust factor and is one of the key drivers in taking our brand to a higher level. Our employees are active on social media and in their social circles promoting CIB and creating a sense of community,” he explains.

The bank’s actions during the pandemic clearly illustrates its commitment to its staff. For example, the bank booked an entire floor in a five-star hotel for the purpose of self-isolation. “Some of our colleagues’ living situations make it difficult to self-isolate – they may have small apartments or live with their parents. Therefore, we booked the whole floor to ensure that their loved ones are safe and protected,” he says.

CIB also set up a dedicated team to ensure that staff can get immediate medical attention, if needed, and HR set up a hotline for staff if they need someone to speak to. “These initiatives show CIB management’s commitment to staff wellbeing. At the end of the day, being a bank is all about people,” says Mr Khalil.

During the past year, CIB ran several campaigns to help its customers shift to digital services. “Egypt remains a highly cash-based economy, but due to the pandemic CIB needed to make many of its services available remotely. Therefore, our campaigns focused on the bank’s digital services as alternatives that customers and non-customers can use to bank safely, such as our e-wallet or mobile app, rather than putting themselves and our staff at risk by walking into a branch,” he says.

QNB: a decade at the top

Despite a challenging domestic operating environment over the past few years due to a regional economic and political blockade, Qatar National Bank (QNB) has once again topped the Middle East table, a position it has held for the past 10 years and illustrative of its strength across the region.

During Covid-19, QNB Group’s brand shifted its promotional messages towards more awareness and a cautionary approach to cope with the pandemic, while taking the necessary precautions to mitigate the situation, says Yousef Ali Darwish, general manager of communications at QNB Group.

“The Covid-19 pandemic reaffirmed the group’s pioneer approach to coping with challenges through enhancing safety measures among customers, staff and the local communities in the countries in which we operate through our international network,” he says.

The bank implemented a pandemic action plan, including a ‘Stay Safe’ campaign designed to minimise contact and abide by social distancing rules, the postponement of small and medium-sized enterprise loans for three months without any interest or fees, and providing premium banking benefits for Qatar’s medical professionals in recognition of their work.

It also enhanced and intensified QNB’s educational tools and materials to promote the bank’s digital, e-channels and contactless payment solutions. And it launched new products to serve its customers worldwide. For example, QNB Al Ahli launched Visa Wearable Prepaid Payment Wristbands to become the newest secure tap-and-pay contactless payment technology in Egypt, along with the introduction of contactless cards to provide customers with a safe shopping experience. Additionally, it made Garmin Pay and Fitbit Pay available to customers in Qatar through its contactless payments platform, QNBpay.

“While much activity has been curtailed, due to pandemic conditions, QNB has successfully leveraged additional channels and its strength to improve its business performance,” says Mr Darwish. “This has translated into maintaining and improving its overall brand value and continued regional leadership in the banking sector.”