RBS finds there is value in discarded brands
British Leyland proved the benefit of not throwing away old brands: each time its image became too tarnished it reverted to one of its old names.
Now RBS (LON:RBS) is considering reviving the long-dead Williams & Glyn’s name for its English and Welsh branches.
Many companies discard old brands, often during the consolidation that follows a takeover or merger. These brands often retain value however, but many companies protect them more to stop a rival using them than to exploit the value themselves. Having paid for the goodwill, the new parent then writes it off.
British Leyland, when that name became the laughing stock of the motor trade, successively chose to call itself Rover, Austin Rover and MG Rover as it worked its way through the history books looking for a name that was better than the one it had damaged.
Royal Bank, despite being a banking disaster, is not necessarily a tainted brand. It is proposing to revive the Williams & Glyn’s name so that it can offload the 312 branches trading as RBS south of Hadrian’s Wall to appease the European Commission’s concerns at the state rescue of the bank. It is effectively ‘creating’ a new bank with its own brand that can be sold – though a banking buyer might end up putting its own name on the chain.
Does Williams & Glyn’s have any intrinsic value? RBS bought Williams Deacon bank in 1930 and nine years later acquired Glyn, Mills & Co. They were not merged within Royal to create the Williams & Glyn’s brand until 1970 however and they adopted the RBS name in 1985. W&G was regarded as a small, well managed, clearing bank, but its life as that brand was short.
RBS needs a name however, and Williams & Glyn’s is easier to revive that creating a brand new brand and better than a “newco” style name. For nostalgists who think banking was better in the old days, W&G may well have value.
RBS wisely retained NatWest as a brand after taking over that rival in 2000. As NatWest was so much larger (if poorly regarded), the argument might have been to drop RBS’s name in a consolidation – but that would have ruined the brand in Scotland. Sensibly the group integrated systems to produce synergies but not marketing.
Lloyds may adopt an RBS solution by using its Cheltenham & Gloucester subsidiary to group branches for sale to satisfy the EU, but the company has a surfeit of brands anyway. It still incorporates the TSB name in its Lloyds brand but now has Halifax, Birmingham & Midshires as well as C&G on the branch banking front besides Scottish Widows and Clerical Medical & General as investment brands. Some rationalisation is surely sensible.
Barclays cleverly uses Woolwich as a product name rather than lose the goodwill of the bank it took over or lose synergy by continuing to operate Woolwich branches.
But if banks are looking for valued former names to employ, there is a wide choice, from Martins and County to Midland. As Leyland demonstrated and RBS is discovering, never throw away an old brand, it may prove valuable.
