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SINGAPORE : As big global banks grapple with the credit crisis, Asian banks are stepping in and helping to change the global banking landscape.
Some experts have said that the time may just be right for Asian banks to project their branding.
Customer perceptions of banks have taken a blow in the last few months, with the unveiling of deeper debt and sub-prime exposure.
And according to industry watcher Brand Finance, the world's top 100 brands have seen their brand value decrease by about 5 per cent in the first nine months of this year.
Within the financial industry, the investment banking sector took a big hit.
Lucy Gwee, managing director, Brand Finance, said: "In the financial service sector, (the loss of branding value for) investment banks is about US$8 billion, and Citigroup as a whole would have the largest hit of nearly US$3.9 billion. The other investment banks like UBS and Goldman saw their brand value drop by around 11 per cent. As for commercial banks, I do not think they are spared as well; the overall drop is about US$3.8 billion."
The loss of brand value can be determined by the decrease in value of a brand's intangible assets such as copyrights, patents, and trademarks.
Recent studies show that intangible assets, which make up a company's brand, account for 66 per cent of global market value.
As US and European names struggle to survive the credit crisis, Asian banks - particularly the Japanese lenders - have seized the opportunity to expand their footprint.
Nomura Holdings is buying over the Asian and European operations of collapsed US investment bank Lehman Brothers.
The deal is seen as helping to shore up its brand value.
Asian banks are seen as being better-capitalised than their European or American counterparts, and some say that despite the cloudy economic outlook, it might be a good time to raise their profile.
And while some companies may be looking to cut on ad spend during the current financial turmoil, industry experts said that keeping up branding may be crucial to keep afloat.
They also noted that companies should look out for opportunities to extend their brand footprint, with valuations being attractive at the moment.
Experts said that branding is more crucial now, given the speed at which the global banking landscape has changed within the last week.
Ms Gwee said: "Within the banking sector, one can expect that there will be a lot of reform, a lot of re-invention, a lot of restructuring in the banking sector...That will have repercussions as well - negative repercussions - but I think...sectors most exposed to the Western economies would be most likely to be affected..."
Following the merger of Merrill Lynch and Bank of America, along with Morgan Stanley selling a 20 per cent equity stake to Mitsubishi UFJ Financial Group, more deals are expected to be on the cards in the sector. - CNA/ms
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