Bank of Scotland

Bank of Scotland

The Bank of Scotland is a commercial and clearing bank based in Edinburgh, Scotland. With a history dating back to the 17th century, it is the second oldest surviving bank in the UK and is the only commercial institution created by the Parliament of Scotland to remain in existence.

The Bank of Scotland was established on 17th July 1695. Although it was founded soon after the Bank of England (1694), the Bank of Scotland was a vey different institution. Whereas the Bank of England was established specifically to finance defence spending by the English government, the Bank of Scotland’s purpose was to support Scottish business, and it was prohibited from lending to the government without parliamentary approval.

In the early 18th century the Bank of Scotland was suspected of holding Jacobite sympathies and consequently its first rival, the Royal Bank of Scotland was formed in 1727. This led to a period of great competition between the two banks as they set to drive each other out of business. Although the “Bank Wars” ended c.1751, competition soon arose from other sources, as other Scottish banks were founded throughout the country. In response, the Bank of Scotland itself began to open branches throughout Scotland. The first branch in London opened in 1865.

In the 1950s, the Bank of Scotland was involved in a number of mergers and acquisitions with other banks. The Bank expanded internationally in the 1970s. The first international office opened in Houston, Texas, followed by more in the United States, Moscow and Singapore. In 1987 the Bank acquired Countrywide Bank of New Zealand and later expanded into the Australian market buy purchasing the Bank of Western Australia.

In 2001 the Bank of Scotland and the Halifax Building Society merged to form HBOS (Halifax Bank of Scotland). In 2008 HBOS was taken over by Lloyds TSB Group.