A few weeks ago, we reported on the results of Interbrand’s 2008 Best Global Brands Survey, observing that the survey’s big losers, year-over-year, were financial services companies.
Of course, conditions in that industry have deteriorated significantly since then, so it is no surprise to see that Wachovia Corp. announced a $23.9 billion-dollar quarterly loss earlier today – the largest ever for a bank. And it also comes as no surprise to see that a write-down tied to a loss of goodwill made up a significant part of that loss.
What is notable, however, is the sheer size of that goodwill write-down: set at approximately $18.8 billion dollars, the write-down is more than three times that total value attributed to the Royal Bank of Canada when it was awarded the title of Canada’s most valuable brand in a 2007 Brand Finance study.
This adjustment goes to show how tremendous – and potentially fleeting – brand value can be. Given Canadian banks’ continued exposure in the markets, both here and abroad, we can expect to see goodwill adjustments to Canadian banking brand values over the next few quarters as well.
We’ll keep you posted on notable developments.