Sberbank becomes most valuable Russian bank

Sberbank becomes most valuable Russian bank

Sberbank became the only Russian brand in the Top100 of the banking rating and the only Russian banking brand in the Brand Finance Global 500, its brand value has increased by 33% over the last year (almost 570 billion rubles). 

Sberbank is the 6th among European banks and 24th among global banks.

Another largest Russian state bank VTB ranked 8th among Russian banking brands (106 billion rubles). The list of top five Russian brands includes Gazprom (305 billion rubles), Lukoil (283billion rubles), Rosneft (180 billion rubles) and Russia's biggest food retailer Magnit (153 billion rubles).

The analysis was conducted on the input factors, namely investment in marketing, brand equity, or the value of goodwill, and output factors, namely its impact on business performance. 

Brand Finance calculates brand value using the Royalty Relief methodology which determines the value a company would be willing to pay to license its brand as if it did not own it. This approach involves estimating the future revenue attributable to a brand and calculating a royalty rate that would be charged for the use of the brand.

An associate professor of Stock Markets and Financial Engineering of RANEPA, Vasiliy Yakimkin, speaking to Vestnik Kavkaza, explained that first of all such Sberbank's success is due to the competent policy of the top management of the bank, in particular, the chairman of the board German Gref.

"He pays a lot of attention to branding his credit organization: more favourable lending rates, new products. The brand is always in the public eye, therefore, it becomes more expensive," the expert said.

According to Yakimkin, Sberbank's wide coverage of not just Russia, but also the CIS countries positively affects the brand's position as well. "So the brand was expensive from the very beginning," he said.

The economist noted that the brand value is a very important indicator for the company. "Its not only the capitalization of a company which matters, but also the brand itself: it affects the value of shares, the share capital. Therefore, Western companies fight for brands, and in case of misuse, they immediately apply to courts and impose fines," Vasily Yakimkin concluded.

The head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business of RANEPA, Konstantin Korischenko, in turn, noted that Sberbank's financial performance plays a significant role in raising the value of the brand.

"In Russia, the banking business is consolidating, primarily in structures supported by the government. And Sberbank is in the forefront of this process: its financial performance, especially in the crisis of 2014-2015, was almost the only positive indicator in the banking sector," he said.

As another important factor, the expert named the charismatic personality of German Gref.

"Thus, the financial results, the good positioning in the media, the changes that have taken place in customer service in recent years, the improvement of the IT platform - all this makes Sberbank one of the leading banks in Russia," the head of the department of stock markets and financial engineering of the Faculty of Finance and the Banking Business  believes.

The economist added that brand value is the difference between the price paid for the business and the value of its net assets. "In this case, this is what is called a good will," Konstantin Korishchenko stressed.