Paris, 7th March 2008
Brand Finance's new ranking of international financial brands has just been published. It covers all banking businesses and types of clients, from consumers to major corporations and institutional clients.
The ranking was established at the end of December 2007 and, therefore, reflects the initial impact of the sub-prime crisis on the reputation of the respective institutions. The BNP Paribas brand is ranked 7th in the Global 500 Financial Brands Index, with an estimated value of USD 14.6 billion, or approximately 15% of the Group's total value. BNP Paribas is up one place from the previous ranking published in 2006 and its brand value has risen more than USD 2 billion (+19%) despite the difficult economic situation. In terms of banks rather than all financial brands, the Group's brand ranks 6th as American Express is a credit card issuer rather than a bank.
The report ranks BNP Paribas in the Top 5 worldwide banking brands in the retail banking segment. Its brand value for retail customers is USD 8.5 billion. Brand Finance has upgraded its rating of BNP Paribas from A to A+. Part of BNP Paribas' success in this survey over the last 2 years is due to the successful integration of BNL which has helped the Group's brand achieve greater visibility. Another happy consequence of the BNP Paribas/BNL marriage is that BNL's brand now appears for the first time in this prestigious report, ranked 157 with a brand value of USD 717 million, a highly satisfying result for a brand that operates in a single country.
These improved rankings confirm that our brand is today a major asset for the Group and represents a genuine added value to its competitiveness. This progress is due to the Group's sales and financial performance, its improvement in terms of quality, and the high visibility of its communications strategy. The Brand Finance ranking is in line with numerous recent studies which have shown very positive developments in the perception of our brand: the No. 1 investment bank in Continental Europe according to the annual Financial Times survey; the No. 2 private bank in the eurozone according to Euromoney; the No. 1 French bank in fee competitiveness according to Mieux-Vivre, and most widely recognized sponsor in France (all sports included) according to Sport Lab.
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Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Brand Finance evaluates brand strength in a process compliant with ISO 20671, looking at Marketing Investment, Stakeholder Equity, and the impact of those on Business Performance. The data used is derived from Brand Finance’s proprietary market research programme and from publicly available sources.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+ in a format similar to a credit rating.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668. It involves estimating the likely future revenues that are attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a ‘brand value’ understood as a net economic benefit that a brand owner would achieve by licensing the brand in the open market.
The steps in this process are as follows:
1 Calculate brand strength using a balanced scorecard of metrics assessing Marketing Investment, Stakeholder Equity, and Business Performance. Brand strength is expressed as a Brand Strength Index (BSI) score on a scale of 0 to 100.
2 Determine royalty range for each industry, reflecting the importance of brand to purchasing decisions. In luxury, the maximum percentage is high, while in extractive industry, where goods are often commoditised, it is lower. This is done by reviewing comparable licensing agreements sourced from Brand Finance’s extensive database.
3 Calculate royalty rate. The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4 Determine brand-specific revenues by estimating a proportion of parent company revenues attributable to a brand.
5 Determine forecast revenues using a function of historic revenues, equity analyst forecasts, and economic growth rates.
6 Apply the royalty rate to the forecast revenues to derive brand revenues.
7 Discount post-tax brand revenues to a net present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.