It is 175 years since Midland Bank opened its doors in Birmingham. Anna Blackaby looks at how it became one of the biggest names in finance before succumbing to takeover
On August 15, 1836 Charles Geach, a former Bank of England employee, set up a bank which would serve the industrialists and merchants of the thriving city known as the Workshop of the World.
Sadly, Midland Bank no longer exists in its own right – it was swallowed up by HSBC in the 1990s and the name disappeared in 1999.
But the legacy of industrial development that it helped usher in is still visible in the region today.
When Midland Bank opened in Union Street 175 years ago, Mr Geach’s early customers were railway builders, iron founders, engineers, utilities and municipal corporations – the firms that built the foundations of the Industrial Revolution that powered Britain into the Victorian era.
John Purser, the Coventry-based honorary secretary of the British Banking History Society, said the establishment of strong local banks went hand in hand with the region’s growing prosperity during that time.
“Banking in general has quite a history in Birmingham,” he said.
“As well as the Midland Bank being founded in Birmingham, there was also Lloyds Bank, which was originally Taylor and Lloyds, and the only municipal bank in the country, The Birmingham Municipal.
“So, from a historical point of view, Birmingham can be said to be the birthplace of important banks that have survived in one form or another up to today.
“Obviously, Midland Bank is now part of a much larger global organisation, but in its time it was very important to the development of industry and commerce, not only in Birmingham but the surrounding areas.”
Mr Geach’s bank was successful right from the start – in its first year, trading profit totalled more than £3,000.
Just 18 months after it opened its doors, the bank moved to new and larger premises higher up Union Street on the corner of Little Cherry Street.
The new site cost £6,300 and even incorporated a house that was intended for Mr Geach’s private use.
In the 1830s and 1840s Midland Bank occupied an important niche in Birmingham business, particularly in the discounting of bills of exchange for its customers.
From the start, the bank set about growing its branch network to serve the needs of the local economy, originally acquiring Stourbridge Old Bank in 1851 and Nichols, Baker and Crane of Bewdley in 1862, both of which traced their roots back to the 1700s and the very early days of the Industrial Revolution.
By the 1860s the bank’s directors realised that business was expanding at such a rapid rate that the Union Street premises would soon become too small to cope.
Midland acquired land on the corner of New Street and Stephenson Place and construction work began on the bank’s new head office in 1867, which was completed two years later. The building still stands today, occupied by Waterstones bookshop.
The bank made its first move outside the region in 1891 with the acquisition of the Central Bank of London, which gave the bank a seat in the London Clearing House, and, in 1898, by taking over the City Bank, which provided a London head office.
By 1918, under the direction of Edward Holden, the bank had deposits of £335 million and ranked as the largest bank in the world – a position it held for a number of decades.
Mr Holden oversaw more than 20 bank amalgamations between 1891 and 1918, and opened new branches throughout England and Wales.
He also encouraged the development of Midland’s international business – it was the first British bank to set up a foreign exchange department at this time.
In 1907 Midland first established links with The Hongkong and Shanghai Banking Corporation (HSBC).
After the Second World War Midland continued expanding its branch network and diversified away from traditional banking by acquiring Forward Trust in 1958, which specialised in instalment finance, leasing and factoring services.
In 1967 it bought a share in Montagu Trust, the owner of Samuel Montagu & Co, the first association between a British clearing bank and a London merchant bank.
And in 1972 Midland led a consortium which bought out travel business Thomas Cook. Then in 1987 HSBC took its first stake in the bank, acquiring 14.9 per cent of the firm.
Their relationship was sealed in 1992 when HSBC pulled off one of the biggest acquisitions in banking history, taking full ownership of Midland Bank as part of its strategy to gain a foothold in Europe.
Mr Purser said: “It’s always sad to see the name of a well-known institution disappear.
“But as things change and global importance becomes more significant, we’re very pleased that HSBC through their archives do sterling work to make sure the history is still maintained.”