Brand Finance: The Most Valuable Investment Banking Brands
There are many global brand rankings in the world, however most feature primarily consumer brands with the occassional B2B brand. For those who manage B2B brands this leaves little in the way of direct comparison and benchmarks in specific sectors, therefore B2B Syndicate asked the team at Brand Finance to create a special ranking from their annual Banking 500 to provide insight on the brand valuation of B2B financial brands. We have created two segments, the first on Asset Management , and the second on Investment Banking, and hope to expand this analysis to larger reports.
Despite a slow growth economy which is likely to continue over the next year; revenue forecasts and investment volume seems positive, and on the rise. Although there are significant regulatory uncertainties, most investment banks seem to be well prepared and implementing adaptive strategies in dealing with them. As the alternative investment industry matures, there is an increased focus on cost reductions and efficiency improvements. Low cost solution providers are challenging established market players. Regulatory changes seem to be the single biggest challenge facing investment managers. In order to comply with the newly enacted regulations, companies are facing increased cost pressures. Data analytics and investment in IT will be a strong source of competitive advantage.
In seizing future opportunities, spending on IT (for operational efficiencies, regulatory compliance, and customer acquisitions), advertising & branding and acquisition of businesses remain critical. There is a general consensus amongst investment managers that North America, particularly the US and Asia Pacific regions are areas of high future growth. This is also in line with brand finance findings, where North America and Asia Pacific are the two biggest regions in terms of brand values.
JP Morgan continues to hold the pole position for the 2nd year running. Its 2014 sub sector brand value currently stands at $11.7 billion. This is an increase of 1.3% over last years’ value of $11.6 billion. JP Morgan is amongst one of the most profitable US banks and despite paying hefty legal fines, the bank continues to show resilience.
Goldman Sachs jumps from 10th to 2nd in 2014 investment banking league tables. The brand value has increased by a staggering $5.1 billion. Tighter cost controls, increases in revenues and innovations in product/services offerings have attributed to the brand value uplift of over 243%. In addition to this, lower discount rates and stronger BSI have made a positive contribution to the brand value.
HSBC drops from 3rd to 5th in this year’s sub sector league table. Although the 2014 brand value which currently stands at $5.5 billion has increased by $0.40 billion, competition brand have seen a much bigger uplift, pushing HSBC further down the league table.
Morgan Stanley drops from 6th in the year 2013 to 10th in the current fiscal year. The brand value has dropped by 14% to $3.7 billion compared to last year’s $4.3 billion. The fall in BV is primarily due the fact the investment management division/operation has contracted by approximately 12%.