Retail banks thrive in 2015 as global banks decline overall
Retail focused banks have put in the strongest performance of all banking brands in 2015 as the investment sector continued to struggle with the fallout from the economic crisis and tougher regulatory scrutiny. This is the key finding of the tenth annual ranking of the world’s most valuable banks released today by WPP and Millward Brown.
Banks such as ING, Santander and the Agricultural Bank of China all managed to forge stronger ties with consumers thanks to their sharp focus on the consumer offer. ING and Santander were the strongest risers in the global banking sector, up 18% and 10% respectively, while Agricultural Bank of China took its rural offer into China’s cities to boost its regional bank performance by 11%.
All banks continue to struggle with trust, but the best performers boosted their trust scores to 101 (where 100 is an average brand) compared to 97 for those which lost brand value. Similarly this year’s best performers scored 113 or above for being responsible compared to 107 for those that declined.
“Retail focus was a winning strategy for banks in 2015. Brands that looked to build relationships with consumers were able to overcome generic antipathy to the banking sector and become ‘the one I trust’ for their customers,” said Sana M Carton, Sector Managing Director at Millward Brown. “Banks and payment brands should also be keeping a watchful eye on the dangers of category disruption as brands like Apple, PayPal, Amazon and Alibaba begin to play an increasing role in the payment experience as part of their wider share of life strategies.”
The successes of the retail focused banks however covered up poor performance from many other banking brands. The total value of the top 10 global banking brands fell by 2% to $120.8bn, a disappointing fall after last year’s 15% growth.
Regional banks performed more positively with a 1% gain to $254.5bn, reflecting their traditionally closer relationships with consumers.
The most successful banking brands in the 2015 BrandZTM Top 100 Most Valuable Global Brands ranking compiled by Millward Brown are HSBC, which retained its position as the no.1 Global Bank at $24bn, while Wells Fargo retained top spot in the Regional Bank chart at $59.3bn.
HSBC has been broadening the services it offers to consumers in the corporate and business space, refreshing its product offering in established markets.
Wells-Fargo has grown its brand value by 9% to $59.3bn, helped by a rising share price, increasing loan volume and decreasing loan losses as the US economy has improved.
Other strong performers include JP Morgan, up 9% to $13.5bn in the Global Banking top 10, with the Bank of China, rising 16% in the Regional Banking Chart at $16.4bn.
The BrandZTM Top 10 Most Valuable Global Bank Brands 2015
|Rank 2015||Brand||Brand Value 2015 ($M)||Brand Value Change||Rank 2014|
The BrandZTM Top 10 Most Valuable Regional Bank Brands 2015
|Rank 2015||Brand||Brand Value 2015 ($M)||Brand Value Change||Rank 2014|
|4||China Construction Bank||22,065||-12%||3|
|6||Commonwealth Bank of Australia||20,599||-2%||5|
|7||Agricultural Bank of China||20,189||+11%||8|
|9||Bank of China||16,438||16||10|
Other highlights and key findings from this year’s BrandZ Top 100 study include:
- Technology is the fastest-growing category – up 24% in the last year, the tech brands in the Top 100 are worth more than $1trn, nearly a third of the value of all brands in the ranking. Apple retook the no.1 spot in the Top 100 ranking, surging past Google with growth of 67% to $247bn.
- Facebook is the fastest riser, with 99% growth achieved through its successful strategy of acquiring and integrating other social apps such as Instagram and WhatsApp, and an understanding of how to monetise and cross-sell its platforms.
- E-commerce boosts retail brand value as Alibaba enters the ranking and overtakes Amazon – Chinese e-commerce leader Alibaba entered the retail ranking at $66.4bn, helping to grow the retail category ranking by 24% and overtaking both Amazon and Walmart. The most valuable retail brands Alibaba and Amazon, which lack physical stores, are now worth more than Walmart, which has 11,000 stores worldwide.
- Insurance sector gets a boost from Asia– the insurance sector grew its total brand value by 21% to $80.4bn. China Life retook the top spot from its rival Ping An, with a 44% rise in brand value to $17.4bn, the strongest performance in the sector. The sector has been buoyed by strong growth in Asia, where rising prosperity, growing car ownership and the role of insurance products as investment vehicles have all contributed to a stellar performance.
The BrandZTM Top 100 Most Valuable Global Brands is now in its tenth year. Analysis of the 10-year trajectory of the brands in the ranking has revealed that:
- Europe’s brand powerhouses stagnate as Chinese brands grow and US brands make a comeback. The number of Chinese brands continues to grow with 14 brands in the Top 100, up from one in 2006, and an increase of 1004% in value. The value of US brands grew by 137% in the last 10 years (up 19% in the last year) compared to just 31% in Europe (down -9.3% in the last year). There are now just 24 brands from Europe in the ranking (down from 35 in 2006). This represents a shift from West to East; most of the brands that have been ‘pushed out’ of the Top 100 by China were from Europe.
- High value brands provide faster bottom-line growth and shareholder value. In the last 10 years, a measurement of the strongest brands from the Top 100 as a ‘stock portfolio’ shows their share price has risen over three times more than the MSCI World Index and almost two thirds more than the S&P500.
Carried out by WPP’s marketing and brand consultancy Millward Brown, the BrandZ Top 100 Most Valuable Global Brands study is the only ranking in the world that uses the views of potential and current buyers of a brand, alongside financial data, to calculate brand value.
The BrandZ™ Top 100 Most Valuable Global Brands report, rankings and more brand insight for key regions of the world and 14 market sectors are available online here. A new suite of interactive smartphone and tablet applications will also be available for free download via Apple IOS and all Android devices from www.brandz.com/mobile or search for BrandZ in the respective iTunes or Google Play app stores.
SoftBank reaches settlement with former WeWork CEO Neumann
(Reuters) – SoftBank Group Corp said on Friday it has reached a settlement with WeWork’s special committee and the company’s co-founder and former chief executive, Adam Neumann, putting to rest a legal battle dating back to 2019.
SoftBank, the new owner of the office-sharing firm, did not disclose terms of the settlement. Media reports earlier this week indicated the deal includes a nearly $500 million cut in Neumann’s payout from SoftBank.
The legal tussle between SoftBank and Neumann started in 2019, when SoftBank agreed to buy around $3 billion in WeWork stock belonging to Neumann as well as current and former WeWork employees. SoftBank later contested its obligation to purchase the shares.
Under the new settlement, SoftBank will purchase around half the shares it had originally agreed to buy, a source familiar with the talks had told Reuters on Monday.
The settlement is also expected to clear the decks for WeWork as it reportedly pursues a public listing by merging with a special purpose acquisition company (SPAC).
“This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork,” said Marcelo Claure, executive chairman of WeWork and CEO of SoftBank Group International.
SoftBank, which poured more than $13.5 billion into WeWork, was pulled into the legal dispute with directors at WeWork after backing out of the $3 billion tender offer agreed when it bailed out the office-sharing firm following a flopped IPO attempt.
(Reporting by Shariq Khan in Bengaluru; Editing by Richard Pullin)
Banks weigh up home working – the new normal or an aberration?
By Lawrence White, Iain Withers and Muvija M
LONDON (Reuters) – As the finance industry prepares for life post-pandemic, commercial banks are moving quickly to harness working from home to cut costs, while investment banks are keen to get traders and advisers back to the office.
HSBC and Lloyds are getting rid of as much as 40% of their office space as an easy way to make savings when bank profits have been crunched by the pandemic.
But there are concerns that remote working does not benefit everyone. Junior staff miss out on socialising and learning opportunities and there are also risks home working can entrench gender inequality.
At investment banks, where long hours in the office were the norm pre-pandemic, bosses say they want most people back where they can see them.
HSBC plans to almost halve office space globally, as it aims to squeeze more use out of the remaining space and increase the number of staff per desk from just over one to closer to two.
Britain’s biggest domestic lender Lloyds plans to shrink its office space by a fifth within three years. Standard Chartered will cut a third of its space within four years, while Metro Bank said it would cut some 40% and make more use of branches.
“We’ve had a period where flexible working has been tested in full, with about three quarters of people not based in offices as we used to call them, and the business has performed remarkably well,” Andy Halford, Standard Chartered CFO, said.
But major investment banks take a different view, with Goldman Sachs Chief Executive David Solomon pouring cold water on the potential of remote working.
“It’s not a new normal. It’s an aberration that we’re going to correct as soon as possible,” he told a Credit Suisse conference on Wednesday.
Barclays CEO Jes Staley, who last year said he thought the days of 7,000 employees trudging into its Canary Wharf headquarters were numbered, is also unwilling to commit for now to large office closures.
The Barclays boss has said the bank had “no plan” to make a major real estate move as Britain’s prolonged third lockdown had shown the strains of working from home.
Nick Fahy, CEO of online lender Cynergy Bank, said working over screens often could not compete. “You might have a disagreement on this, that or the other but actually over the coffee machine or over a glass of wine or a bit of lunch, issues can be resolved.”
Some banks have acted quickly because they are used to flexing workforces in line with economic cycles, particularly in investment banks, Oliver Wyman principal Jessica Marlborough said.
But some are waiting on analysis of staff productivity changes before making final decisions, while others were mindful junior staff may still prefer going into offices, she said.
Banks are also concerned women may lose out from the shift to remote working.
“We thought the pandemic would be a big leveller for women. But actually what we’re starting to see is it’s extremely challenging to get women to move jobs in a pandemic,” Marlborough said.
“Banks were making progress in hiring a more balanced workforce in terms of gender and other metrics, but they’re actually struggling now (as banks are finding) they (women) are less likely to seek out a new job.”
Union leaders said part of the reason was that some women are juggling more childcare responsibilities during the pandemic.
Dominic Hook, national officer for UK union Unite, said banks must ensure working from home is voluntary, use of surveillance tools is limited, and employers respect staff hours so work does not spill into evenings and weekends.
“Our concern is that it won’t actually be a choice and that banks will pressure staff to work from home,” Hook said.
There are also concerns hybrid working will favour employees who visit the office more regularly, as they can spend more time in person with colleagues and managers, said Richard Benson, managing director at Accenture Interactive.
The staff most likely to go back to the office are traders, bank executives said, while back-office functions such as finance, risk management and IT will spend more time working remotely.
In Germany, Deutsche Bank said it had been challenging to adapt home office spaces for traders and expected many will want to return, but not all.
“We will pay more attention to the personal circumstances at home. Dealers also have children or parents in need of care. We have become more sensitive,” said Kristian Snellman, Deutsche Bank’s head of investment banking transformation for Germany and EMEA.
The trend to shed offices predated the pandemic as many banks made cuts after the 2007-09 financial crisis. Some have already made moves as a result of the pandemic, such as NatWest, which shut its tech hub in north London last summer.
Retained offices are being remodelled, with desks removed to make way for collaboration and break space such as coffee areas, gardens and libraries, property consultancy Arcadis said.
“It’s not just about adding a ping pong table and table football and hoping it will work, it’s about making sure people get downtime,” said Sarah-Jane Osborne, head of workscape at Arcadis.
David Duffy, CEO of Virgin Money, said the bank is among those planning to strip out office cubicles.
“The world of large-scale populations returning to a tall skyscraper building to come in and do their e-mail in the office doesn’t make any sense,” he said.
(Reporting By Lawrence White and Iain Withers in London and Muvija M in Bengaluru, Additional reporting by Patricia Uhlig in Frankfurt. Editing by Rachel Armstrong and Jane Merriman)
Bank of England’s Haldane warns inflation “tiger” is prowling
By Andy Bruce
LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, adding that central banks may need to respond.
In a clear break from other members of the Monetary Policy Committee who are more relaxed about the outlook for inflation, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.
“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online.
“But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”
Haldane’s comments prompted British government bond prices to fall and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation.
“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.
(Editing by David Milliken)
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