Four Nigerian banks namely – First Bank of Nigeria, Guaranty Trust Bank, Zenith Bank and United Bank for Africa, have been ranked among the 2016 Top 500 Banking brands.
First Bank of Nigeria Limited has retained its number one banking brand ranking in Nigeria for the fifth consecutive year in the global ranking of banks by The Banker magazine.
According to the 2016 Top 500 banking brands ranking published in the February edition of The Banker magazine of Financial Times Group in conjunction with Brand Finance, London, United Kingdom, First Bank moved up the scale in 16 places from 336th position in 2015 to 320th this year.
A press release from the Country Representative of The Banker magazine in Nigeria, Kunle Ogedengbe, added that three other Nigerian banks also made the ranking.
They are Guaranty Trust Bank, which moved to 389th in the world from 417th in 2015; Zenith Bank that dropped from 388th in 2015 to 392th in 2016; and United Bank for Africa that returned to the ranking in the 447th position. Access Bank that made the ranking at 496th position in 2015 dropped from the 2016 Top 500 Banking brands.
First Bank’s brand value, which is the licensing rate that a third-party would need to pay to use the bank’s brand increased to $322 million in 2016 from $300 million in 2015, while that of Guaranty Trust Bank also increased to $243 million from $213 million.
The 2016 brand value of Zenith Bank increased to $238 million from $235 in 2015, while United Bank for Africa that made a return to the ranking since 2012 has a brand value of $198 million. UBA’s brand value in 2012 was $121 million.
For the ranking’s methodology, Brand Finance obtained brand-specific financial and revenue data; modeled the market to identify market demand and the position of individual banks in the context of all other market competitors; established the royalty rate for each bank; calculated the discount rate specific to each bank, taking account of its size, geographical presence, reputation, gearing and brand rating and discounted future royalty stream (explicit forecast and perpetuity periods) to a net present value which is the brand value.
This approach was used for its being favoured by tax authorities and the courts because it calculates brand values by reference to documented third-party transactions, which can be arrived at through publicly available financial information.
Of the five countries in Africa that made the ranking, Nigeria has the highest brand value increase of $249 million. Egypt moved up by $239 million; Togo gained $134 million while South Africa and Morocco lost $878 million and $213 million respectively.
Globally, Wells Fargo of the United States of America retained the number one banking brand in the world for the fourth consecutive year and was followed by banks in China and United Kingdom in the first 10. Wells Fargo’s brand value for 2016 is $44.1 billion from $34.9 billion in 2015.