Valuation Methodologies and Estimation of Mongolian Commercial Banks from a Brand Value Perspective

Purpose - The main purpose of this research work is to study about the brand valuation methodologies and to estimate Mongolian top commercial banks’ brand values by using the superior methodology. Design/Methodologies/approach - This research is exercised on the last three years’ annual financial reports of Khan Bank, Trade and Development Bank and Golomt Bank, which are top commercial banks of Mongolia. This research used Interbrand methodology with its “S” curve and Hirose methodologies to estimate their respective brand values from 2016 to 2018. Findings - The results of our research paper are the following: (1) Brand strength of Khan Bank, TDB and Golomt Bank registered at 77, 55 and 54, respectively; (2) The discount rate of the commercial banks under study was estimated at between 7.58 and 8.92; (3) The brand value of TDB was estimated at 243.2 billion MNT, and Khan Bank’s brand value was 131.8 billion MNT, while the brand value of Golomt Bank was 44.3 billion MNT in 2018. The brand value of the three banks was unequal for the last three years, due to differences in factors, such as changing risk funds of the selected banks. Research implications or Originality - Researchers predicted that Khan Bank’s brand value to get the highest score due to its total assets, number of departments, accumulated assets, and margin level. However, the result was different from our prediction and Trade and Development Bank has the highest brand value because of its high brand value. Furthermore, by estimating the brand value of local commercial banks for the first time, we are enabling commercial banks to compare their results with competitors and it will influence positively to the development of the banks and banking sector.