The Westminster Bank was
organised in 1834 as the London and Westminster Bank, the first
joint-stock bank in London. This firm was the first bank established
under the auspices of the Bank Charter Act 1833, which allowed
joint-stock banks to be founded in London. For various reasons, the
press, private banking concerns, and the Bank of England were so
hostile to the Bank Charter Act that London and Westminster's
management was primarily concerned with defending the company's
right to exist rather than setting up an extensive branch network.
As a result, the bank opened only six London branches in its first
three years and no additional offices were established until nearly
20 years later.
London and Westminster made its first acquisition in 1847, when it
bought Young & Son. In about 1870 it acquired Unity Joint-Stock
Bank, and mergers with Commercial Bank of London and Middlesex Bank
had been arranged in 1861 and 1863 respectively. By 1909 London and
Westminster had opened or acquired 37 branches in and around London.
Yet, despite this expansion effort, the bank felt the effects of
competition from provincial banks like Lloyds and Midland. These two
banks had already established large regional branch networks and
were quickly encroaching upon the London market. In order to meet
this challenge, in 1909, London and Westminster merged with the
influential and prestigious London and County Bank, which had 70
offices citywide and almost 200 in rural counties.
The Surrey, Kent and Sussex
Banking Company had been established at Southwark in 1836 and soon
had branches in places like Croydon, Brighton, Maidstone and
Woolwich. It was renamed the London and County Banking Co. in 1839.
By 1875 it had over 150 branches and was the largest British bank.
The resulting entity was named the London County and Westminster
In 1913, the bank formed a
subsidiary, London County and Westminster Bank (Paris), which opened
branches during and after World War I in Bordeaux (1917), Lyon
(1918), Marseilles (1918) and Nantes (1919). The bank itself also
directly established offices in Madrid (1917), Barcelona (1917),
Antwerp (1919), Brussels (1919), Bilbao (1919) and Valencia (1920).
These operations were converted into a foreign bank in 1920 and
renamed London County Westminster and Parrs Foreign Bank, becoming
Westminster Foreign Bank in 1923. All the Spanish branches were
closed in 1923–4 due to deteriorating economic conditions in Spain
and discrimination against foreign banks. Control of the remaining
branches was exercised from London, although between 1940 and 1944
contact with them was lost due to the German occupation.
Birkbeck Building and Freehold Land Society, formed in 1851,
developed a large deposit-taking business that developed into
banking activity. Cheque books were issued from 1858 and by 1872 the
business was trading under the title of Birkbeck Bank. In 1910, when
its balance sheet totalled £12.26 million and it had 112,817
accounts, the bank experienced a run. Continuing rumours about its
financial position and a climate of depreciation in gilt-edged
securities, led to a suspension of payments. The Bank of England
provided support for the immediate payment of 10 shillings in the
pound to depositors, but as most of its deposits were held as
long-term securities the bank lacked liquidity and went into
receivership. In 1911 its goodwill and premises were purchased from
the receiver by London County and Westminster Bank. In 1917, bank
officials decided to acquire the Ulster Bank (which continued to
operate separately), with 170 branches throughout Ireland, and in
1918 bought Parr's Bank, with over 320 offices throughout
England. These purchases made London County Westminster and Parrs
(which became simply Westminster Bank Limited in 1923) the
fifth-largest bank in England. The Parr's name survives in the
Bloomsbury, Parr's Branch of National Westminster Bank at 214 High
Holborn, London, WC1.
During the economic difficulties of the late 1920s and early 1930s,
the bank kept tight centralised control over the continental branch
of the business to avoid the dangers of too rapid an expansion in
unfamiliar markets, but this policy stunted Westminster's
international operations. It did mean that the bank escaped the bad
debts and currency fluctuations that plagued many other banks
between the world wars, allowing the domestic side of the business
to grow steadily.
The merger of Westminster and
National Provincial Bank, announced in early 1968, shocked the
British public and banking community. In the late 1960s, the Bank of
England tried to rationalise the banking industry through a policy
known as competition and credit control, which aimed to put banks on
a more equal and competitive footing and to improve control of the
nation's money supply. Although the Bank of England indicated a
willingness to allow mergers as part of the rationalisation process,
no one had seriously believed it would permit mergers among the
largest and most influential banks.
The District Bank (a 1962 National Provincial acquisition), National
Provincial, and Westminster Bank were fully integrated in the new
firm's structure, while Coutts & Co. (a 1920 National Provincial
acquisition), Ulster Bank and the Isle of Man Bank (a 1961 National
Provincial acquisition) continued as separate operations. Duncan
Stirling, chairman of Westminster Bank, became first chairman of the
fifth largest bank in the world. In 1969 David Robarts, former
chairman of National Provincial, assumed Stirling's position. The
statutory process of integration was completed in 1969 and the new
company, National Westminster Bank Limited, opened its doors for
business on 01 January 1970. NatWest, as it became known, is now
part of the The Royal Bank of Scotland Group.