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Banks continue to dominate the Brand Finance Singapore 100

12 June 2017
This article is more than 3 years old.

ComfortDelGro and Genting Singapore replace Semcorp and Keppel in the top 10

UOB posts the highest brand value gain amongst the 3 banks and also joins in the Brand Finance Global 500 ranking for the first time.

  • Total value of Top 100 Singapore brands in 2017 has increased to US$42.6 billion, up 4% from US$41.1 billion in 2016.
  • DBS retains the #1 Most Valuable Singapore Brand for 2017 however it’s brand strength remains stagnant.
  • Singapore Airlines is still the strongest brand in Singapore with AAA- rating, beating DBS and OCBC by a hair's breadth.
  • Top 10 brands contribute 57% of the total value while Bottom 50 brands contribute only 7% of the total value.
  • The average ratio of brand value/enterprise value (BV/EV) of Top 100 dropped from 18% to 16%, indicating that businesses failed to utilize the brand for the business success.

Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test, evaluating which are the most powerful and valuable, publishing the Brand Finance Singapore 100.

Formidable Three

The three local banks have been performing well for a number of years and in 2017, we see no other contenders capable of challenging the top three spots. DBS, with US$ 5.4 billion brand value, holds its crown at the top of the Brand Finance Top 100 Most Valuable Singapore Brands table for the fifth consecutive year. OCBC and UOB again finish second and third with a brand value of US$3.64 billion and US$3.62 billion. Notably, UOB is the most improved brand by absolute value, its brand value has increased US$856million, closing the gap with OCBC.

‘We see the more aggressive moves from the banks particularly in M&A, with DBS acquiring wealth and retail business of ANZ in 5 markets and OCBC acquired National Australia Bank and Barclays wealth business in Singapore and Hong Kong. These will provide a boost to the brands’ values after the business integration and we expect the top 3 spots continue to be dominated by the banks next year.’ said David Haigh, Group CEO of Brand Finance Plc.

‘The 3 banks have contributed 30% of the total brand value in Singapore, up from 27% last year. The growth is in line with other financial brands around the world but we wish to see a more diverse mix at the top.’ he added.

David also congratulated UOB on having the highest brand value increase amongst all the top 100 brands indicating the strong brand and business alignment by UOB contributing to this significant increase.

“For UOB, there is possibly more upside in the future as their BSI has still room to grow and that will surely provide them with some buffer when DBS and OCBC integrate their acquisitions impact into the business and might report a higher revenue base”, commented Samir Dixit, managing Director of Brand Finance Asia Pacific.

The Focus on Brand Strength

The brand strength, measured by Brand Strength Index (‘BSI’), the average BSI of the Top 100brands has improved dropped from 60.3 in 2016 to 59.6 this year. The brands have remained stagnant in terms of their brand strength and while they may be doing well locally, they have been losing out to some of the key competitors in the region as they lack competitiveness outside of Singapore market.

“What’s extremely alarming is that the “BBB” rated brands have increased to a whopping 13 in total, up from 1 in 2016”, highlights Samir Dixit, Managing Director of Brand Finance Asia Pacific.

“Singapore Airlines is named the strongest brand amongst one of the three brands with triple-A brand rating, along with DBS and OCBC. However, it is also the only brand in Top 10 losing brand value due to weakening of brand strength (down from AAA last year) and weaker business performance whilst others have an average of 14% growth in brand value”, pointed out Jake Ng, analyst with Brand Finance Asia Pacific.

Brand Highlights

With a US$ 857 million BV increase, UOB had the highest brand value gain amongst all Singapore brands. In fact more than double the value increase of # 2 highest value increase brand CapitaLand which had a brand value increase of US$ 384 million.

ComfortDelGro and Genting Singapore, with 12% and 23% value growth, made their way into the top 10, replacing Semcorp and Keppel who in the tough industry in this couple of years.

CapitaLand missed the top 10 spot by a narrow margin, with brand value surging 69%. The high revenue forecast helped the company to finish at 11th place.

Samir Dixit, Manging Director of Brand Finance Asia Pacific highlighted that “While the Singapore brands have grown considerably well overall, it is the brand strength for most brands that still remains a concern. Also, the rankings still remains very top heavy with 57% of the total brand value contributed by the Top 10 brands and 93% contributed by the Top 50 brands. We would like to see a more diverse mix at the top and more significant value increase at the bottom which means other brands must start focusing on their value and brand strength.”

Samir Dixit also challenged the Singapore companies to be more brand-driven and not sales or offers-driven. “These while help sell in the short term, might destroy the long term value and the strength of the brand. Brand has to be a strategic agenda for the senior management and boards and must be managed like any other business asset and not just a legal trademark.”

“It is exciting to see UOB having made it to the Brand Finance Global 500 rankings in 2017 with DBS and OCBC. Other than the Big 3 in Singapore, there are only handful of ASEAN brands in the Global 500, including the Telkom Indonesia and Sampoerna from Indonesia, Malaysia and Thailand state-owned oil & gas giants – Petronas and PTT”, he added.

Click here for the full Brand Finance Singapore 100 Table

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Konrad Jagodzinski
Konrad Jagodzinski
Communications Director
Brand Finance
Florina Cormack-Loyd
Florina Cormack-Loyd
Senior Communications Manager
Brand Finance

About Brand Finance

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.

Methodology

Definition of Brand

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

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 Valuation Approach

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.

Disclaimer

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.

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