Brand value a form of intangible assets rarely interested by financial institutions in the past is developing rapidly. In the ranking for Top 500 banks with most valuable brands in the world released by the world’s leading brand valuation consultancy Brand Finance in early February, Vietnam has four representatives, including Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank), Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank), Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), and Vietnam Prosperity Commercial Joint Stock Bank (VPBank). All banks included in the list saw sharp increase in brand value compared to the previous year. Particularly, VietinBank is one of top ten banks with biggest Brand Value Change and BIDV is one of top ten banks in the world in terms of brand strength.
This is the first year Vietnam has a private bank made it to the Brand Finance Banking 500. The bank’s brand, according to Brand Finance, was valued at 354 million US dollars, ranked 361. In just three years since 2016, the brand value of VPBank (assessed by Brand Finance) has increased by 6.3 times from 56 million US dollars. In addition, the bank’s Brand rating was also rated A on the rating scale from D to AAA+. Its Brand Strength Index was scored at 58.76 points on a scale of 0100.
Previously, in the ranking for the 40 most valuable brands in Vietnam announced by Forbes in mid-2018, VPBank was ranked 13th and was the leading private bank in brand value.
Lai Tien Manh, director of Mibrand Vietnam Joint Stock Company said that in the context when the market is more volatile and there are many new developments intertwined, maintaining position and asserting brand will be increasingly important. Thus, making efforts on brand building will be a decisive factor which directly affects consumers’ choices.
The report of Brand Finance also emphasized that a strong brand would help attract more customers, build up customer loyalty and create better motivation for bank employees. But above all, a good brand will help create better profits.
According to VPBank’s representative, the bank’s brand value has increased from the concentration on building a dynamic and friendly bank to customers. VPBank chooses digital marketing channels as a key channel to promote its brand and products. In addition to the traditional retail products targeting small and medium-sized enterprises (SMEs) and individual customers, VPBank is the first bank to bring Timo digital banking products into operation, catching the trend of user habit change with the rise of handheld devices.
In addition, VPBank also wholly owns FE Credit a company operates in consumer finance segment. FE Credit currently holds more than 50 percent of the consumer lending market share for motorbike, mobile instalment loans, unsecured loans, etc. in Vietnam.
Brand expert Nguyen Duc Son of Richard Moore said that the final result in the long term for a business when developing its brand is still revenue and profit. Each brand and advertising tool has its own goal. That goal can be set in the short or long term, but in the end, the business still needs to know how branding affects their business.
Banks’ brand building is also a form of competition to expand new customer base, and also to care, connect, and more exploit existing customers. Each time customers come to the counter or log in the bank’s online trading platform is a time for evaluating and re-recognising the bank’s brand.
For Vietnamese banks, the brand value increase is directly proportional to business profits. For example, Vietcombank announced its 2018 profits at more than 18 trillion dong, leading the entire system, and BIDV also posted its profit in 2018 at over 9.6 trillion dong, the highest in the bank’s history.
In the group of private banks, VPBank also showed a strong development momentum. Closing the year 2018, the total consolidated operating income of VPBank reached more than 31 trillion dong, up by 24.2 percent compared to 2017. The bank’s consolidated pre-tax profit was approximately 9.2 trillion dong, up by 13 percent compared to 2017, and 1.8 times higher than the 2016 profits.
For three consecutive years from 2016, VPBank ranked 4th in profit number in the system. It was also one of the banks with the highest Return on Assets (ROA) and Return on Equity (ROE) with respectively 2.4 percent and 22.8 percent.
Particularly, VPBank’s brand strength is also strongly expressed in the strategic segments in which the bank is leading, including consumer finance, individual customers, SMEs and small business traders. For example, in the segment of SMEs, VPBank has been voted as the best bank in Vietnam for SMEs by both the International Finance Organisation and the prestigious magazine The Asian Banker.
With more than 80,000 SME customers, VPBank currently serves about 10 percent of the number of businesses nationwide. Meanwhile, the strategy of digitising banking services has also contributed to raising VPBank’s brand to a new level, attracting more and more customers to the bank. With the establishment and improvement of digital banking and the online lending platforms such as VPBank Online, VPBank Dream and YOLO, VPBank in the recent years has been voted by domestic and international organisations as the typical digital bank in Vietnam.
