First Bank of Nigeria Limited has been named as the most valuable banking brand in Nigeria in The Top 500 Banking Brands of The Banker magazine of the Financial Times and Brand Finance, London, United Kingdom for the sixth consecutive time.
First Bank of Nigeria Limited has been named as the most valuable banking brand in Nigeria in The Top 500 Banking Brands of The Banker magazine of the Financial Times and Brand Finance, London, United Kingdom for the sixth.
According to a press release issued on Sunday by the Country Representative – Nigeria of The Banker magazine, Mr. Kunle Ogedengbe, First Bank leads four other Nigerian banks in the global ranking.
With $301 million brand value, First Bank ranked 357 leads Guaranty Trust Bank ranked 395 with a brand value of $258 million, Zenith Bank ranked 414 with a brand value of $247 million, Access Bank ranked 476 with a brand value of $182 million and the United Bank for Africa with a brand value of $172 million ranked 487 in the world.
According to the chief executive of Brand Finance, David Haigh, the brand value is the amount a third party will need to pay in using the brand name.
As for the methodology of the ranking, “Brand Finance employs a discounted cashflow technique to discount estimated future royalties at an appropriate rate to arrive at a net present value of a bank’s trademark and associated intellectual property – its brand value”, noted Brian Caplen, the editor of The Banker.
Caplen stressed that the process involves five steps of obtaining brand-specific financial and revenue data; modeling the market to identify market demand and the position of individual banks in the context of all other market competitors; establish the royalty rate for each bank; calculate the discounted rate specific to each bank, taking account of its size, geographical presence, reputation, gearing and brand rating; and discount future royalty stream (explicit forecast and perpetuity periods) to a net present value – the brand value.
He noted that the approach is used for two reasons: it is favoured by the tax authorities and the courts because it calculates brand values by reference to documented third-party transactions and it can be done based on publicly available financial information.
Globally, deputy editor of the magazine, Joy Macknight informed that Industrial and Commercial Bank of China is number one with a brand value of $47,832 million followed by Well Fargo of the United States of America with a brand value of $41,618 million.
The top ten banking brands ranking in the world are shared by four countries: China and United States of America with four each while United Kingdom and Spain have one each.
The remaining eight banks in the top ten are China Construction Bank, Chase (JP Morgan & Co of the USA), Bank of China, Bank of America, Agricultural Bank of China, Citibank (USA), HSBC (UK), and Satander (Spain) noted Macknight.
In the top 50 countries in the world, only four African countries made the list. These are South Africa (26), Nigeria (42), Egypt (46) and Morocco (47).
According to the February 2017 edition of the magazine, First Bank is however the only Nigerian bank in the top 10 banking brands in Africa along with nine others banks from South Africa, Egypt and Morocco.