Global banking brands: where does ME stand?

It is common knowledge throughout the world that the Middle East is a hot bed of financial activity. Yet, where as the regions banks may hold plenty of cash, what can be said about their brand value? The Brand Finance review of the top 500 financial service brands in the world, provides great insight into the top finance brands by sector. Unfortunately for the Middle East's banks, their brand value could not get anywhere close to that of the big brands in the rest of the world.

The fragility of the Middle East financial industry was brought to light as the financial crisis hit. Despite the boom of recent years in the region, the recession led to an exodus of foreign investment, as well as a big chunk of the expat workforce. The global economic crisis damaged the level of foreign investment into the UN Economic and Social Commission for Western Asia (ESCWA) region. Foreign direct investment (FDI) to the area, covering 14 Arab countries, fell from US$64 billion in 2007 to around US$60 billion in 2008. This illustrates how people were prepared to invest money in the fledgling financial sector in the Middle East whilst things were going well, but then quickly lost confidence at the first signs of trouble.

Whereas mature financial institutions, such as the Bank of America, HSBC and BNP in the West have developed a strong brand value that can even withstand the effects of a global recession, the younger financial groups in the Middle East have not been able to develop the same level of brand strength. This means that the level of confidence shown in these banks is also low compared with others in the world that have lived through, and survived, more economic difficulties.

This summer even saw Bahrain, the banking capital of the Middle East, for more than three decades, experience harsh times. The Gulf International Bank (GIB) laid off 59 employees at its head office in Bahrain - almost a fifth of the total working there - sparking demonstrations by fellowBahraini bank staff and trade union activists. The problems even led to officials to proclaim the bank's future was "finished."

So, the banking brands of the Middle East are failing to match those around the globe - but just how big is the gap?

24/09/09

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