By Suresh Menon

SINGAPOREAN banks should learn a lesson from HSBC in building brands and grow global market share.

At present they are simply "sitting on their hands and playing safe. They could follow the Aussie and Canadian lead", says a global banking review.

It continues: "They could still bid for spin-offs in Britain and elsewhere. In some cases, conservatism is a virtue. In the current situation, it's a vice. A huge, missed opportunity.

"In some cases low marketing and brand spend is a wise way of saving shareholders funds. In this case, it spoils a once-in-a-lifetime growth opportunity."

The rather bold advice comes from the fourth edition of the BrandFinance Banking 500, an annual review of the top banking brands in the world published in conjunction with The Banker.

The report, which measures companies by both brand strength and brand value as of Dec 31 last year, details how all segments of the banking industry have recovered.

It says local banks are world leaders in banking practice and service and the brands are well-known and strong in Singapore.

But they are hiding their light under a bushel, it says. The report adds: "We should remember that 50 years ago, HSBC was a tiny Hong Kong trade bank.

"HSBC has taken calculated risks and heavily invested in brand building right through the crisis. No coincidence (that) it has grown its global market share fast as a result."

The review says that the banking sector has begun to show tangible signs of recovery, with the world's 500 most valuable banking groups growing by 62 per cent in terms of market capitalisation and their brand values cumulatively increasing by 49 per cent.

HSBC retains its place as the most valuable brand in the world for the third year in a row, according to the review, increasing in brand value by 12 per cent to US$285 billion (S$401 billion).

Bank of America, the second most valuable brand increased in brand value by 24 per cent to US$26.1 billion. However, smaller American brands showed much higher percentage increases than Bank of America, including Goldman Sachs, Chase and JPMorgan.

Asian markets continue to do well, but grew by only 31 per cent in brand value because Japanese brand values declined by 3 per cent. By contrast, India and China saw brand value growth by 137 per cent and 58 per cent, respectively.

Singapore's banks have seen recovery in their brand values, with OCBC taking the lead as its brand value increased by 35 per cent. UOB's rose by 28 per cent and DBS had the smallest increase of 12 per cent.

However, their brand rankings in the BrandFinance Banking 500 fell across the board. Mr David Haigh, chief executive of BrandFinance, says: "Singapore's banks have done well this year in absolute terms, but less well compared with certain Brazilian, Russian, Indian and Chinese banks, which are booming because their economies are."

Despite the recession, Singapore banks did not suffer a loss of confidence as they are conservatively run. In many ways there has been no systemic shock in Singapore.

Santander is the world's fastest- growing retail bank brand, finds the review, coming third overall in the top 500. The Spanish banking group saw its brand value rise by US$14.8 billion, an increase of 136 per cent to US$25.6 billion.

The Banking 500 rankings also note that the United States' dominance of the global banking industry has declined, with a decrease in the number of US banks in the Global Top 500 down from 95 in 2008 to 85 last year. Although US bank brands recovered last year the overall increase in brand value was only 29 per cent.

smenon@sph.com.sg

The writer is Business Editor of my paper.

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