FE Editorial : Not as bankable as China

The Financial Express

 

The Top 500 Global Financial Brands list released by UK-based Brand Finance (see page 1 story)—with 18 Indian entries—in a way reflects the goings-on in the Indian banking sector. Indian banks and financial institutions have consolidated their position, with their brand value growing by a fifth over 2010. This reflects the Indian banking sector’s resilience in overcoming the slowdown of 2008-09. A majority, 13, of the 18 Indian brands in the top financial brands list improved their brand value over the last year. When you start looking at individual performances, the story gets layered with a clear difference between well-run and badly-managed banks, irrespective of their ownership. The country’s biggest lender, SBI, the first-ever Indian bank to break into the top 50 club in 2010 at rank 36, not just moved up two rungs, its brand value also jumped by over a billion dollars on the back of sustained product innovation and customer-orientation. Ditto for Central Bank of India, which stormed up 81 places in the list to rank 390, even as some of its other public sectors bank (PSB) peers saw an erosion in value, chiefly Bank of India and Union Bank of India. Other PSBs on the list, like Corporation Bank, Allahabad Bank and Canara Bank, managed to improve their brand values, even though some slipped on the ranking table.
The real India story is the strong showing by private banks. Axis Bank, under its new leader Shikha Sharma, saw brand value go up almost 50%, with the bank now just shy (at rank 202) of breaking into the top 200. The other big gainer was Kotak Mahindra Bank, which shot up 24 positions and increased brand value by over a third. The country’s largest private-sector lender, ICICI Bank, also improved its ranking by a notch, and brand value by over $337 million, to remain the only other Indian bank in the top 100 apart from SBI at rank 34.
Globally, the big event was the re-entry of two Chinese banks in the top 10—Industrial & Commercial Bank of China (ICBC) at rank 8 and China Construction Bank at number 10 after a two-year hiatus. Importantly, ICBC pipped Citibank, which slipped to rank 9 from 5 last year. With just two Indian banks in the top 100, compared to 10 from China and three from Brazil, and none in top 25 (four from China and three from Brazil), clearly, the heft of the Indian economy is yet to translate into global size and scale of its banking sector.