Union Bank of Scotland (1830-1955)

The Glasgow Union Banking Company

The Union Bank of Scotland was originally established as the Glasgow Union Banking Company in 1830, the first of a number of joint-stock banks set up in Glasgow at that time.

The capital was set at £2 million, divided into 8,000 shares of £250 each and more than half the subscription had been raised by the first General Shareholders Meeting in February 1830.  A detailed analysis of shareholdings reveals that over 80% of shareholders were based in Glasgow and the west, and represented merchant and manufacturing interests.

The business of the bank grew rapidly between 1836 and 1843 primarily as a result of a series of amalgamations with the Thistle Bank, Sir William Forbes, James Hunter and Company, the Paisley Union Bank, Hunters and Company of Ayr and the Glasgow and Ship Bank.

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The emergence of the Union Bank

As a result of these numerous amalgamations, it was agreed in May 1843 that the company's name would change to the Union Bank of Scotland.  The change in name reflected the bank's expansion, both in terms of its balance sheet figures, and also in terms of its coverage of the country.  There were two further amalgamations, with the Aberdeen Banking Company in 1849, and then the Perth Banking Company in 1857.

Expansion in the 19th century

During the 1840s and '50s the bank gradually became more adventurous in its lending, facilitating loans to industries as diverse as textiles, iron, coal, shipbuilding and railways.  The funding of this expanded lending required increased deposits, and by 1857 the Union Bank had the largest branch network in Scotland, with a total of 97 branches.  The bank opened an office in London in 1878.

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Developments in the 20th century

In 1919, the Union Bank was one of eight banks in the UK to subscribe to the British Overseas Bank, and the bank's general manager resigned to become chairman of the new bank.  From 1920, the dominant figure within the Union Bank was its general manager, Norman Hird, who had been appointed at the age of 34. Hird's efforts concealed, but could not alter, the fact that after 1919 the Bank was in some difficulty.  The problems were mainly related to the Union Bank's strong connections with heavy industry, which lurched from crisis to crisis for most of the interwar period.  Despite the problems, a grand new head office building was opened in 1927 at 110 St. Vincent Street, Glasgow.

The question of amalgamation with Bank of Scotland  had first been raised in the 1930s, but serious negotiations were opened with the directors of the Bank of Scotland in 1950.  Agreement was reached in 1952, and amalgamation took place in 1955.

 

Further information

• 'The history of the Union Bank of Scotland' by Robert Rait (John Smith & Son, 1930), chapters 11-17.
• An extensive archive of material relating to the Union Bank of Scotland is held by HBOS Group Archives. 
• Records and artefacts relating to the Union Bank are also on display in the Museum on the Mound  in our corporate headquarters.

To return to the Bank of Scotland family tree click here.
To return to Corporate History click here. 

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