Bank of Scotland facts for kids
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Headquarters building on The Mound
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Native name
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| Public limited company | |
| Industry | Financial services |
| Founded | The Governor and Company of the Bank of Scotland 17 July 1695 |
| Headquarters | Edinburgh, Scotland, UK |
| Products | Banking and Insurance |
| Total assets | £359 billion (2016) |
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Number of employees
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20,000 |
| Parent | Lloyds Banking Group |
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The Bank of Scotland plc (in Scottish Gaelic: Banca na h-Alba) is a commercial and clearing bank. It is based in Edinburgh, Scotland. This bank is part of the Lloyds Banking Group. The Parliament of Scotland created the bank in 1695. Its goal was to help Scotland trade more with other countries. It also aimed to create a strong banking system in the Kingdom of Scotland.
The Bank of Scotland has a long history, starting in the late 1600s. It is the fifth-oldest bank still operating in the United Kingdom. The Bank of England was started just one year before it. The Bank of Scotland is the only business created by the Parliament of Scotland that still exists today. It was one of the first banks in Europe to print its own banknotes. It still prints its own sterling banknotes today. This is allowed by special laws for Scottish banks.
In 2006, a law called the HBOS Group Reorganisation Act 2006 was passed. This law helped simplify the bank's structure. So, "The Governor and Company of the Bank of Scotland" became Bank of Scotland plc on September 17, 2007. The Bank of Scotland joined Lloyds Banking Group on January 19, 2009. This happened when HBOS was bought by Lloyds TSB.
Contents
History of the Bank of Scotland
How the Bank Started
The Bank of Scotland was created by an act of the Parliament of Scotland. This happened on July 17, 1695. The act was called "Act for erecting a Bank in Scotland." The bank opened for business in February 1696. The Bank of England started just before it in 1694. But the Bank of Scotland was very different.
The Bank of England was made to help the English government pay for defense. The Bank of Scotland was created by the Scottish government to help Scottish businesses. It was not allowed to lend money to the government without Parliament's approval. The law that created the bank gave it a special right to be the only public bank in Scotland for 21 years. The bank's leaders could raise £1,200,000 pound Scots (which was £100,000 pound sterling). The owners (shareholders) had limited liability. This meant they were only responsible for the money they invested.
John Holland, an Englishman, was one of the bank's founders. Its first main accountant was George Watson.
The Bank in the 1700s and 1800s
Some people thought the Bank of Scotland supported the Jacobites. Its first competitor, the Royal Bank of Scotland, started in 1727. This led to a big fight between the two banks. They both tried to put the other out of business. These "Bank Wars" ended around 1751. But soon, other Scottish banks started up. To keep up, the Bank of Scotland began to open branches all over Scotland.
After the Acts of Union in 1707, the bank helped change old Scottish coins into Sterling. It was one of the first banks in Europe to print its own banknotes. It still prints its own sterling banknotes today. This is allowed by special laws for Scottish banks.
The bank also helped make the Scottish banking system safe and stable. This became very important after some banks failed in 1772. The bank's main building moved to the Mound in 1805.
In 1857, another bank called the Western Bank failed. The Bank of Scotland and other Scottish banks stepped in. They made sure that all of the Western Bank's notes were paid. The Bank of Scotland opened its first branch in London in 1865.
The Bank in the 1900s
In the 1950s, the Bank of Scotland joined with or bought other banks. In 1955, it merged with the Union Bank of Scotland. The bank also started offering loans to regular people. It bought North West Securities, which later became Capital Bank. In 1971, the bank agreed to merge with the British Linen Bank. This bank was owned by Barclays Bank. After the merger, Barclays Bank owned 35% of the Bank of Scotland. Barclays kept this share until the 1990s.
In 1959, the Bank of Scotland was the first bank in the UK to use a computer. It used the computer to manage customer accounts. On January 25, 1985, the Bank of Scotland launched HOBS. This stood for Home and Office Banking Services. It was an early way for customers to do banking from home. Customers could see their accounts on a TV screen. They used the Prestel telephone network for this.
Expanding Around the World
In the 1970s, North Sea oil was found in Scotland. This helped the Bank of Scotland grow into the energy business. The bank then used its knowledge in energy finance to expand globally. Its first international office opened in Houston, Texas. More offices followed in the United States, Moscow, and Singapore. In 1987, the bank bought Countrywide Bank in New Zealand. This bank was later sold to Lloyds TSB in 1998. The Bank of Scotland also expanded into Australia. It bought the Perth-based Bank of Western Australia.
A difficult time for the bank was in 1999. It tried to enter the United States retail banking market. This was a joint project with a religious leader named Pat Robertson. Many groups in the UK did not like this plan. They disagreed with Robertson's views on homosexuality. The bank had to cancel the deal. This happened after Robertson made a controversial comment about Scotland.
Joining HBOS
Creating HBOS
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In the late 1990s, many financial companies in the UK joined together. Many large building societies became banks or merged with existing banks. For example, Lloyds Bank and TSB Bank merged in 1995. They created Lloyds TSB. In 1999, the Bank of Scotland tried to take over National Westminster Bank. The Bank of Scotland was much smaller than NatWest. So, this was seen as a bold and risky move. However, The Royal Bank of Scotland made a better offer. The Royal Bank won the takeover battle.
The Bank of Scotland then looked for other merger chances. It thought about merging with Abbey National, but this idea was dropped. In 2001, the Bank of Scotland and the Halifax agreed to merge. They formed HBOS ("Halifax Bank of Scotland").
HBOS Reorganisation Act
In 2006, HBOS got a special law passed. It was called the HBOS Group Reorganisation Act 2006. This law helped the group work with a simpler structure. The law allowed "The Governor and Company of the Bank of Scotland" to become a public limited company. This new company was called Bank of Scotland plc. It became the main banking part of HBOS. Halifax plc and Capital Bank plc became part of Bank of Scotland plc. The Halifax brand name was kept, but it operated under the Bank of Scotland's banking license. The Capital Bank brand was slowly removed.
These changes from the Act happened on September 17, 2007.
Part of Lloyds Banking Group
In 2008, during the Great Recession, HBOS Group agreed to be taken over. It joined the Lloyds TSB Group.
Banknotes of Scotland
Today, the Bank of Scotland is not a central bank. But it still has the right to print pound sterling banknotes. Two other Scottish commercial banks also have this right. These notes have the same value as notes printed by the Bank of England. The Bank of England is the central bank of the United Kingdom.
History of Banknotes
The Bank of Scotland was one of the first European banks to print paper money. This money could be exchanged for cash whenever someone wanted. This was very helpful because Scottish coins were not in good shape in the late 1600s. Before the mid-1800s, private banks in Great Britain and Ireland could print their own banknotes. Money from Scottish, English, Welsh, and Irish banks was used everywhere.
In 1826, there was anger in Scotland. The United Kingdom Parliament tried to stop banks from printing banknotes worth less than five pounds. Sir Walter Scott wrote letters about this. He used the name "Malachi Malagrowther." His letters caused such a strong reaction that the government had to give in. They allowed Scottish banks to keep printing £1 notes.
1995 Banknote Series
The Bank of Scotland's previous banknotes were from 1995. They were called the Tercentenary Series. This was because they were printed in the bank's 300th anniversary year. Each note shows Sir Walter Scott on the front. On the back, they show pictures of industries where Scotland is good:
- £5 note: shows oil and energy.
- £10 note: shows distilling and brewing.
- £20 note: shows education and research.
- £50 note: shows arts and culture.
- £100 note: shows leisure and tourism.
These notes are no longer used.
2007 "Bridges" Series
The Bank of Scotland started printing a new series of banknotes in late 2007. These notes all feature famous Scottish bridges. It took at least three years for the old notes to be replaced. Like before, the front of the notes shows a picture of Sir Walter Scott. The picture on the 2007 series is based on a painting by Henry Raeburn.
New safety features were added to these notes. This includes a metallic security thread in every banknote. It shows the note's value and its bridge image. A new hologram and foil patch are on the front of the £20, £50, and £100 notes. This patch shows the Bank of Scotland logo and the note's value.
- £5 note features the Brig o' Doon.
- £10 note features the Glenfinnan Viaduct.
- £20 note features the Forth Bridge.
- £50 note features the Falkirk Wheel.
- £100 note features the Kessock Bridge.
On March 1, 2018, the Bank of Scotland stopped using its paper £5 and £10 notes. They were fully replaced with new plastic (polymer) notes.
2016 Polymer Series
The Bank of Scotland began printing new banknotes on polymer (a type of plastic) in 2016. The first was the £5 note. The main theme of Scottish bridges is still used for this series. But the designs have been updated with new features. The portrait of Sir Walter Scott by Henry Raeburn is the same as the 2007 notes. However, it is now on the right side of the notes. The bank's headquarters, "The Mound," is shown in the middle of the note. The size of these new notes is also smaller.
- £5 note features Brig o' Doon.
- £10 note features Glenfinnan Viaduct.
- £20 note features the Forth Bridge. A special £20 note also features the Queensferry Crossing.
- £50 note features Falkirk Wheel and The Kelpies.
- £100 note features Flora Murray.
What is the Bank of Scotland Today?
The Bank of Scotland is part of the Lloyds Banking Group. It has several other brands that work with it:
- Halifax
- Intelligent Finance
- Birmingham Midshires
- Bank of Scotland Corporate
- Capital Bank
- Bank of Scotland Investment Services
- Bank of Scotland Private Banking
Leaders of the Bank of Scotland
The Bank of Scotland has had many important leaders over the years. Here are some of the people who served as Governor:
- John Holland (1696–1697)
- David Melville, 3rd Earl of Leven (1697–1728)
- Alexander Hume, 2nd Earl of Marchmont (1728–1740)
- Charles Hope, 1st Earl of Hopetoun (1740–1742)
- Colonel John Stratton (1742)
- John Hay, 4th Marquess of Tweeddale (1742–1762)
- Hugh Hume, 3rd Earl of Marchmont (1763–1790)
- Henry Dundas, 1st Viscount Melville (1790–1811)
- Robert Dundas, 2nd Viscount Melville (1812–1851)
- James Broun Ramsay, 1st Marquess of Dalhousie (1851–1860)
- John Campbell, 2nd Marquess of Breadalbane (1861–1862)
- George Hamilton-Baillie, 11th Earl of Haddington (1863–1870)
- John Dalrymple, 10th Earl of Stair (1870–1903)
- Alexander Bruce, 6th Lord Balfour of Burleigh (1904–1921)
- William Mure (1921–1924)
- Sidney Elphinstone, 16th Lord Elphinstone (1924–1955)
- Sir John Craig (1955–1957)
- Steven Bilsland, 1st Baron Bilsland (1957–1966)
- Henry Hepburne-Scott, 10th Lord Polwarth (1966–1972)
- Ronald Colville, 2nd Baron Clydesmuir (1972–1981)
- Sir Thomas Risk (1981–1991)
- Sir Bruce Pattullo (1991–1998)
- Sir Alistair Grant (1998–1999)
- Sir John Shaw (1999–2001)
- Sir Peter Burt (2001–2003)
- George Mitchell (2003–2006)
- Dennis Stevenson, Baron Stevenson of Coddenham (2006–2007)
Sponsorships
The Bank of Scotland sponsored the Scottish Premier League from 1998 to 2007. After that, they decided to put their money into supporting local sports instead. They also sponsored Scottish Athletics for many years.
Images for kids
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Headquarters building on The Mound
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Bank of Scotland logo
See also
In Spanish: Bank of Scotland para niños
- British banknotes
- List of banks
- The Royal Bank of Scotland
- William Paterson (banker)
- Homelink
- Museum on the Mound
