re-branding exercise, taking advantage of its global scale to put
clear water between itself and rivals. The initiative also aims to
rebuild revenue streams after the great dash for cash among
clients. John
Evans reports on the project.
HSBC could become a breakaway brand in
private banking, gaining a major competitive advantage over
weakened institutions like UBS, Citigroup and Merrill Lynch/Bank of
America following an estimated $10 million rebrand.
Go deeper with GlobalData
While HSBC’s Private Bank does not yet have
the critical mass of its global private banking rivals, it has
benefited from its parent’s conservative business model and has not
been affected by the wholesale client outflows suffered by some of
its global counterparts.
As of the end of 2008, HSBC ranked as the
sixth-largest wealth manager defined by client assets under
management, with a total of $352 billion – a credible performance
given its private banking arm only dates back to 2000. It was set
up after the integration of the Republic offshore banks and some
private banking operations within the HSBC group in the UK and
Asia.
Now, HSBC is re-branding its global private
bank, at a cost estimated at $10 million. A mandate has been given
to advertising group WPP to bring the private bank’s positioning
closer to the core values of HSBC group while retaining the
“specialness” of private banking, according to HSBC officials.
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By GlobalDataA recent PricewaterhouseCoopers
global private banking survey showed that 93 percent of responding
business managers said a clear, high-profile brand is the “most
important differentiator” for their firm and of crucial importance
in attracting new clients.
Despite that, few private banks have tried to
use high-profile advertising and brand-building campaigns to gain a
competitive edge. And where they do, the success has been limited,
experts say.
Many of the rich are new to their wealth and
just do not know where “trustworthy professional advice can be
found,” says John Clemens, managing partner at consultancy Tulip
Financial. A recent survey shows that most wealth investors still
don’t use advisory firms despite the ravages the crisis is causing
to their personal assets (see UK super-rich ‘apathetic’ amid
collapse).
This should be “a call for more proactive
marketing from professional wealth advisers seeking additional
business,” Clemens says, adding the wealth business can no longer
rely on client referrals as a major source of new customers.
Richard Williams at wealth consultancy MDRC
even goes as far to say that the current marketing of private
banking is a barrier to wider usage among clients.
“The brand image projected by many private
banks and wealth managers does not readily appeal to the ‘core’ HNW
individual,” Williams says.
The image projected by private banks and
wealth managers should, he adds, “be focused more closely on the
aspirations of the target market”.
At HSBC, it is stressed that the branding
exercise comes amid wider concerns in private banking generally
over rebuilding income streams as well as client trust, as the
credit crisis and economic downturn takes hold.
Chris Meares, chief executive of HSBC private
banking, says the wealth industry is “challenged” by the inevitable
tendency of clients to sit on cash because of the credit
crisis.
“When asset values and trading volumes go
down, fees go down. Margins are less, so we have to cut costs or
grow the business somehow,” he declares.
Meantime, the strength of the HSBC global
franchise is demonstrated by research from marketing consultancy
Brand Finance, showing the British-based bank has retained its
number one position among global financial brands for 2009.
While its notional brand value fell 40 percent
to $25.4 billion amid the general attrition in financial services,
HSBC still benefited from being a global brand with a AAA+ brand
rating, a compilation of the top 500 marques in finance by the
consultancy showed.
The geographic split of HSBC, which portrays
itself as the ‘World’s Local Bank’ has buffered its exposure to the
credit crisis, spreading risk both globally and across all revenue
streams, the consultancy said.
In contrast, UBS, the biggest global private
bank, fell to 15th place from 12th last year, in the wake of huge
losses and write-downs of nearly $50 billion of impaired assets,
the ranking showed. Merrill Lynch, now part of Bank of America,
plunged to 63rd in the ranking, down from 30th.
Citigroup, which is putting much of its wealth
management capacity including Smith Barney into a joint venture
with Morgan Stanley, saw its brand value fall to seventh from
second the previous year, with brand worth slashed to $9.8
billion.
Among British banks, Royal Bank of Scotland
fell to 42nd from 26th where its brand is valued at $2.5 billion.
Barclays now stands at 14th from 11th the prior year, with a brand
value of $7.5 billion. Among Swiss players, Credit Suisse fell to
13th from 10th, with brand value cut to $7.7 billion.
Among pure play private banks, Julius Baer
retreated to 143rd from 122nd, where its brand worth is estimated
at $665 million. EFG International was down to 251st from 221st,
with a worth of $242 million.
Overall, the top 500 bank brands fell 32
percent in value to a total $218 billion, though this was less than
the drop in their aggregate market capitalisation of 51 percent to
$3.9 trillion in 2008.
|
BRANDING |
||
|
Global finance – 2009 rankings |
||
|
Rank |
Brand |
Brand value 2009 ($bn) |
|
1 |
HSBC |
25.4 |
|
2 |
Bank of America |
21 |
|
3 |
Wells Fargo |
14.5 |
|
4 |
Santander |
10.8 |
|
5 |
ICBC |
10 |
|
6 |
American Express |
9.9 |
|
7 |
Citi |
9.8 |
|
8 |
BNP Paribas |
9.4 |
|
9 |
China Construction Bank |
9 |
|
10 |
Chase |
8.7 |
|
Others |
||
|
13 |
Credit Suisse |
7.7 |
|
15 |
UBS |
7.6 |
|
143 |
Julius Baer |
0.7 |
|
251 |
EFG International |
0.2 |
|
Source: Brand Finance |
||
