The Union Bank of Scotland (1830-1955)

Banknotes

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 during the 1830s. The business of the bank grew rapidly between 1836 and 1843 primarily as a result of a series of five amalgamations. These were 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 . Following the first four of these mergers, it was agreed in May 1843 that the Glasgow Union Banking Company would change its name to the Union Bank of Scotland. At the same meeting the capital structure and some aspects of the organisation of the bank were also altered.

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 with the Perth Banking Company in 1857.

During the 1840s and '50s the bank gradually became more adventurous in its lending, both in the range of industries and in the sums allowed as individual credits. The main sectors in which loans were made were textiles, iron, coal, shipbuilding and railways. The funding of this expanding lending policy required increased deposits, and by 1857 the Union Bank had the largest branch network in Scotland, with a total of 97 branches. The Edinburgh board (which consisted of former partners of Forbes & Co.) also insisted on some cautious measures such as increasing the bank's reserves and, following the appointment of Charles Gairdner as general manager in 1862, the London investments were reviewed and holdings increased. The Bank's fortunes were closely tied in with the rise and fall of Glasgow industry, and increasingly had to rely on the investment skills of its London Office (opened in 1878) to smooth out fluctuations.

 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. Amalgamation took place in 1955.