Quick Take: Chinese Bank Brands Outperform Global Peers

The brand value of China’s top banks increased by 22% in 2017, more than double the average growth experienced by the world’s top 500 banks.

The value of the 45 Chinese bank brands on the top 500 list rose to $317 billion, while the 76 U.S. bank brands on the list were valued at $260 billion in total, according to new research from consultancy Brand Finance.

The Industrial and Commercial Bank of China and China Construction Bank are the world’s two most valuable bank brands, valued at $59.2 billion and $56.8 billion, respectively. China’s two other major state-owned banks, Bank of China and Agricultural Bank of China, ranked fourth and sixth on the most valuable bank brands list. The four banks are also the world’s largest by assets, according the to the most recent ranking from S&P Global.

According to Brand Finance’s research, the world’s top 500 bank brands, valued at $1.18 trillion, will see competition from the technology sector.

“The big tech companies are already encroaching into areas traditionally supplied by banks such as payments and financing, and are backed by powerful brands,” said Brand Finance CEO David Haigh.

Brand Finance calculates a brand’s value by applying a royalty rate to forecasted revenues attributed to the brand. The royalty rate is calculated based on the industry’s royalty range, which is calculated from licensing agreements, combined with a company or bank’s brand strength determined by marketing investment, stakeholder equity and business performance.

Contact reporter Liu Xiao (liuxiao@caixin.com)