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The Top 10 Most Valuable Bank Brands in the US

Four of the top 10 most valuable brands in the world are based in the US, according to a study by London-based Brand Finance. The value of American banking brands grew by 28% in 2010, or $45 billion. The top 10 US bank brands are now cumulatively worth $157 billion.

Bank of America’s brand was valued at $30.6 billion, followed by Wells Fargo’s at $28.9 billion and Chase at $19.2 billion. At the bottom of the list in the 10th spot, US Bank’s brand is worth only $5.4 billion.

Launched in 1996, Brand Finance calculates the value of each banks’ brand using a “royalty relief method,” estimating the notional price a company would have to pay for the brand name. (You can read more about the Brand Finance methodology in its report.)

BofA became the most valuable banking brand in the world, replaced the UK’s HSBC who held the top spot last year. BofA and Wells Fargo top the global list at #1 and #2 respectively, followed by HSBC which slipped to third and Santander in Spain at #4. The BrandFinance Banking 500 contains 90 American banks and 20 UK banks. There were only 85 US banks on the list last year.

Please keep in mind as you review the list that Brand Finance (which has no connection or affiliation with The Financial Brand) is trying only to quantify the value of the brand, not the value of the entire organization — e.g., “How much is ‘Bank of America’ worth as a brand if it were cleaved from tangible assets and the operational side of the business?”

If you believe a brand’s value should be determined by a brand’s ability to either influence consumer selection/preference and/or command a higher price premium than competitors, then you could make the case that Goldman Sachs has the most valuable brand in banking. Goldman Sachs can slap their name on anything and it will sell …for billions, even if it isn’t worth one penny. But Goldman Sachs probably doesn’t belong in the same category as BofA; there’s a huge difference between retail and investment banking. Goldman Sachs could stand alone in its own category: “money magicians.” After all, they are able to create money out of thin air.

You can download a 55-page summary of the Brand Finance Banking 500 for free by clicking here. A detailed valuation report is available for $3,500. You can also peruse the online directory.

If your financial institution wants to know how much its brand is worth, you can contact Brand Finance.

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US Bank Brand

1 1 2 Bank of America AAA- $30.6 18%
2 2 4 Wells Fargo AA+ $28.9 32%
3 5 8 Chase AA- $19.2 43%
4 9 5 Citi AA $17.1 19%
5 13 11 American Express AA $15.5 22%
6 16 7 Goldman Sachs AAA- $13.4 -3%
7 18 14 JP Morgan AA- $13.2 13%
8 29 23 Morgan Stanley AA- $6.9 -13%
9 32 33 Visa AAA- $6.6 30%
10 37 39 U.S. Bank AA $5.4 43%

#1 Bank of America

Bank of America ($30.6B) is the most valuable banking brand in the USA. Its brand value has increased by 18% and it has a brand rating of AAA-. Despite concerns of further mortgage-related write-downs, Bank of America is also currently the #1 most valuable banking brand in the world. In 2010, the company actively sought to repair its reputation — supporting new consumer protection legislation, modifying 285,000 loans, 76,000 in the fourth quarter alone, and engaging in more philanthropic activities — which was underpinned by strong results, the integration of Merrill Lynch and overall improvements in the consumer banking market.

#2 Wells Fargo

Wells Fargo ($28.9B) is the second most valuable banking brand in the USA with a brand rating of AA+. It had one of the highest net incomes in the country at $12.4B and this together with its conservative lending practices has helped it dodge many of the mortgage woes plaguing its rivals. Its brand value has increased by 32% this year, driven by its acquisition and subsequent rebrand of Wachovia. It held the top spot in home loans in 2010 and had the smallest exposure to Fannie Mae and Freddie Mac. While its rivals were brought down by the collapse in subprime mortgage, the majority of Wells Fargo’s didn’t because its sub-prime mortgages were of such high quality. It has more commercial banking branches (187) than its rivals which is a big plus, especially considering that the bank is targeting commercial lending as a key growth segment in the future.

#3 Chase

Chase has a brand value of $19.2B, an increase of 43% on the previous year and a Brand Rating of AA-. The huge increase in brand is mainly attributable of its acquisition of WaMu and its subsequent rebranding. This has given Chase its first major presence on the West Coast and resulted in the bank becoming the nation’s second-largest branch network, with locations reaching 42% of the US population. The acquisition also more than doubled the number of checking accounts to approximately 25 million.

Total net revenue for retail financial services during this period has amounted to US$25 billion. Although not as profitable, this is about US$5.9 billion higher than the investment banking division and is one of the contributors to Chase’s outperforming its sister bank in terms of brand value. This also reflects the general improvement in the retail banking sector over the past year.

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#4 Citi

Citi was one of the worst affected financial institutions during the economic crisis and consequently its brand suffered. The bank has been uncertain about its long term direction while also being slow to admit errors. Recently it has been trying to rectify this by focusing on improving customer relations. Citi has also started repaying its TARP bailout funds. Even though it returned to profitability in December 2010, it has not convinced customers, shareholders or the markets that it has yet turned the corner. These factors have mean Citi’s value increased only slightly to $17.1B, based largely on its improved brand rating of AA.

#5 American Express

American Express’s brand value suffered drastically in 2009 but has almost recovered to its pre-crisis valuation, now at $15.5B. Its brand’s AA rating slid from 2008 when it was AAA. AmEx continues to be a strong brand because it has managed to weather the crisis much better than the rest of the industry. It has had one of the lowest default rates in the country as it caters to high income customers, reinforcing its image as a premium brand. It also has one of the most comprehensive rewards programs, earns the most revenue in annual fees compared to its competitors, and earns the highest proportion of income from card spending.

#6 Goldman Sachs

Goldman Sachs with a brand value of $13.4B is the sixth most valuable banking brand in the USA. It was the envy of Wall Street as the credit crisis struck but has since been engulfed by many a controversies — everything from CDO’s to Greece’s currency swap deal. This resulted in Goldman Sachs losing about 3% in brand value and a lower brand rating of AAA-. It has recently tried to repair its image by implementing the recommendations of its “Business Standards Committee,” but the real question is whether Goldman Sachs efforts are sincere or not.

#7 JP Morgan

JP Morgan has been one exception among its peers, managing to increase its brand value to around $13.2B. Like other banks it has also suffered from negative public perception, trying to shake its image by focusing on both customers and employees. It announced record revenues in its global markets division of $22B, record investment banking fees of $7.2 billion.

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#8 Morgan Stanley

Morgan Stanley has had a rough ride. It has tried to make necessary changes in its strategy, but doubts remain over management’s ability to sell investments to small investors while also trying to deliver financial advice to major corporations. These doubts resulted in a decrease in brand value of 13%, down to $6.9B. It has, however, excellent cost management discipline. It’s on its way to building back its FICC division and has a strong Tier 1 capital ratio of 9.7%. This helped Morgan Stanley to improve its Brand Rating to AA-. They will have to work hard to maintain this rating.

#9 Visa

Visa is the largest branded credit- and debit card issuer. It has a brand value of $6.6B, an increase of almost 30% in brand value. It has a brand rating of AAA-, bolstered by two primary factors: (1) the growth in fees from emerging economies, and (2) the continuing transition to a cashless economy. Visa payments were up across the board around the world. However, new regulations mean there will be decreasing revenue from the USA market. But Visa is well poised to leverage its brand to expand further in the emerging markets. It continues to build international visibility, including huge worldwide sponsorships of the FIFA World Cup and the 2012 London Olympics.

#10 US Bank

While the financial crisis has crippled many banks, varying in size from small regional banks to well known banks, US Bank has fared much better with its brand value increasing 43% to $5.4B and a brand rating of AA. It remained profitable throughout the crisis and recently announced that it was on track to achieve pre-crisis profitability levels. It also acquired two regional banks (Downey and PFF) increasing its reach and brand presence. It has a healthy Tier 1 capital ratio close to 11%, and has been ranked as one the safest banks in the US, just behind Wells Fargo. Coincidentally, Wells Fargo is poised to become one of US Bank’s main competitors, as they are both targeting commercial lending as a key growth segment.

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  1. You’re right Jeff, placing a valuation on a brand is not the same thing as measuring its strength. A small company can indeed have a very strong brand — much stronger than BofA in terms of its ability to influence buying behaviors — but because smaller brands have narrow audiences with limited reach, they will almost always have lower brand valuations. In crude terms, I think you could say a brand’s value is:

    [the brand’s cumulative reach]
    [the brand’s power, or degree/level of influence]
    brand value

    For instance, your firm might have a stronger brand than Acme Global Advertising, Inc. But if you had control of the Acme Global brand, you could make more money than with the CBC brand. But again, you’re right, just because people will pay more for one brand than another doesn’t necessarily mean the more expensive brand is “better.”

    You bring up a number of other issues regarding brand valuations — ubiquity, differentiation, clarity — many of which I think are nicely captured in Young & Rubicam’s “Brand Asset Valuator” model. They break a brand’s strength down into four categories:

    Differentiation – degree of uniqueness from competitors
    Relevance – the actual and perceived importance of the brand to consumers
    Esteem – perceptions of quality and the feeling of growth (or decline) in a brand’s popularity of a brand
    Knowledge – consumer’s awareness of the brand and what it offers

    Banks score low for differentiation. Ho-hum scores for relevancy. Some are capable of creating esteem. And while banks are generally good at generating name awareness, they aren’t really good at creating true brand knowledge.

    As far as the BofA brand… here it goes (from the consumer perspective): big, fees, branches + ATMs everywhere (convenience/access), US flag/patriotism, Kiefer Sutherland/24, and lots of stuff like NASCAR and MLB. They’ve smartly aligned their brand with other brands that consumers are more passionate about.

  2. This is an interesting study, and I think it’s a legit list and piece of research. What this study is obviously based on, though, is the financial value that comes from the ubiquity of a brand. In other words, “if someone wanted to buy Bank of America’s name/likeness, it would cost $30.6 billion…because of how ubiquitous and widely known it is.” The ubiquity of a brand, however, is not what makes it a strong brand, in my opinion. Rather, clarity about what the brand stands for is what makes it strong (vs. simply well known).

    We’d be hard pressed to find many people who could even tell us what the Bank of America brand stands for. Or what the Chase brand stands for. Or even more importantly, I’d bet a dollar we couldn’t find a single person to effectively describe the difference between what the BofA and Chase brands stand for. They’re both ubiquitous but equally generic.

    Ubiquity just means you’ve invested a lot of time and money making your name familiar to people…not that they know–or care–what your brand really stands for.

  3. Thank you for providing the link to the Y&R brand evaluator–that’s a great tool and I largely agree with their model for assessing the brand.

    I also agree with your assessment of how banks score in this model. I think one of the big challenges in the banking industry is exactly what you said, that “banks are generally good at generating name awareness, they aren’t really good at creating true brand knowledge.” I see this as a big road block to brand progress in the banking category, because too many bankers think brand awareness and brand knowledge are the same. There is still very much an attitude in many (if not most) banks and credit unions that “if we just had the budget to advertise more, we’d be able to compete better.” They don’t realize that while spending more money on ads would increase awareness, it wouldn’t necessarily have any impact on true brand knowledge…or worse yet, on addressing brand apathy.

    The real problem lies in the fact that consumers are thinking “I’ve heard of you…I just don’t care.”

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