Everything about Royal Bank Of Scotland totally explained
The Royal Bank of Scotland Plc (
Scottish Gaelic:
Banca Rìoghail na h-Alba) is one of the retail banking subsidiaries of the
Royal Bank of Scotland Group plc, which together with
NatWest and
Ulster Bank, provides branch banking facilities in the
United Kingdom. Royal Bank of Scotland has around 700 branches, mainly in Scotland though there are branches in many larger towns and cities throughout
England and
Wales. It shouldn't be confused with the
Bank of Scotland. The Royal Bank of Scotland and its parent, the Royal Bank of Scotland Group, are completely separate from the fellow Edinburgh based bank, the
Bank of Scotland, which pre-dates the Royal Bank of Scotland by 32 years. The Bank of Scotland was effective in raising funds for the
Jacobite Rebellion and as a result, The Royal Bank of Scotland was established to provide a bank with strong
Hanoverian and
Whig ties.
History
Foundation
The bank traces its origin to the
Equivalent Society which was set up by investors in the failed
Company of Scotland to protect the compensation they received as part of the arrangements of the 1707
Acts of Union. The
Equivalent Society became the
Equivalent Company in 1724, and the new company wished to move into banking. The British government received the request favourably as the "Old Bank", the
Bank of Scotland, was suspected of having
Jacobite sympathies. Accordingly the "New Bank" was chartered in 1727 as the Royal Bank of Scotland, with
Archibald Campbell, Lord Ilay appointed as its first governor.
In 1728, the Royal Bank of Scotland became the first bank in the world to offer an
overdraft facility.
Competition with the Bank of Scotland
Competition between the Old and New Banks was fierce, and centred on the issue of banknotes. The policy of the Royal Bank was to either drive the Bank of Scotland out of business or to take it over on favourable terms.
The Royal Bank built up large holdings of the Bank of Scotland's notes, which it acquired in exchange for its own notes, and then suddenly presented them to the Bank of Scotland for payment. To pay for these notes the Bank of Scotland was forced to call in its loans and, in March 1728, to suspend payments. The suspension relieved the immediate pressure on the Bank of Scotland at the cost of substantial damage to its reputation, and gave the Royal Bank a clear space to expand its own business, although the Royal Bank's increased note issue also made it more vulnerable to the same tactics.
Despite talk of a merger with the Bank of Scotland, the Royal Bank didn't possess the wherewithal to complete the deal. By September 1728 the Bank of Scotland was able to start redeeming its notes again, with interest, and in March 1729 it restarted lending. To prevent similar attacks in the future, the Bank of Scotland put an "option clause" on its notes, giving it the right to make the notes interest-bearing while delaying payment for six months; the Royal Bank followed suit. Both banks eventually decided that the policy they'd followed was mutually self-destructive and a truce was arranged, but it still took until 1751 before the two banks agreed to accept each other's notes.
Scottish Expansion
The bank opened its first branch office outside Edinburgh in 1783 when the first
Glasgow branch opened. Further branches were opened in
Dundee,
Rothesay,
Dalkeith,
Greenock,
Port Glasgow and
Leith during the early 1800s. In 1821, the bank moved from its original head office in Edinburgh's
Old Town to
St Andrew Square in the
New Town which remains the bank's registered head office to this day.
The rest of the 19th century saw the bank pursue mergers with other Scottish banks, mainly in a response to failing institutions. The assets and liabilities of the Western Bank were acquired following its collapse in 1857 and in 1864 the Dundee Banking Co. was acquired. By 1910, the bank had 158 branches and around 900 staff.
In 1969, the bank merged with the National Commercial Bank of Scotland to become the largest clearing bank in Scotland.
Expansion into England
The expansion of the
British Empire in the latter half of the 19th century saw the emergence of
London as the world's largest financial centre, attracting the Scottish banks to expand south into England. The first London branch of the Royal Bank of Scotland opened in 1874. However, the English banks moved to prevent further expansion by the Scottish banks in England, and after a government committee was set up to examine the matter, the Scottish banks decided to drop their expansion plans. An agreement was reached whereby English banks wouldn't open branches in Scotland; and Scottish banks wouldn't open branches in England outside of London. This agreement remained in place until the 1960s, although various cross border acquisitions were permitted.
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The Royal Bank's English expansion plans were resurrected after
World War I, when it acquired various small English banks, including London based
Drummonds Bank in 1924; and William Deacon's Bank based in North West England in 1930; and Glyn, Mills and Co in 1939. The latter two were merged in 1970 to form Williams and Glyn's Bank; and later rebranded as the Royal Bank of Scotland in 1985.
Banknotes
The Royal Bank of Scotland, along with
Clydesdale Bank and
Bank of Scotland, still prints its own
banknotes. The current designs of the notes depict
Lord Ilay (1682–1761), the first
governor of the bank on the front, and Scottish castles on the back.
Current issue in circulation are:
Branding
The RBS Group uses branding developed for the Bank on its merger with the National Commercial Bank of Scotland in 1969. The Group's logo takes the form of an abstract symbol of four inward-pointing arrows known as the "
Daisy Wheel" and is based on an arrangement of 36 piles of coins in a 6 by 6 square
, representing
the accumulation and concentration of wealth by the Group.
Further Information
Get more info on 'Royal Bank Of Scotland'.
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