Glasgow

Glasgow is a city in Scotland. The Royal Bank of Scotland traces its heritage there back to 1783.

The background

When The Royal Bank of Scotland first established a branch in Glasgow in 1783, the Bank was already more than half a century old. From the outset, it had served customers from Glasgow and the West of Scotland, but only through head office in Edinburgh. The Bank had not opened branch offices anywhere.

Eighteenth century Glasgow was developing rapidly, but still had some way to go before it grew into a modern industrial city. Its population in the mid-1700s was well under 30,000, but its tobacco trade with America was thriving. When the American War of Independence halted that trade, Glasgow’s merchants quickly transferred their interests to cotton and other imports, and became more involved in manufacturing.

From the 1750s, banks began to be established in Glasgow, but these were local, small-scale partnerships, limited in their scope and stability by their small number of owners. There was a need for lending on a larger scale, such as could be offered by a bigger, shareholder-owned bank. In 1783, The Royal Bank of Scotland decided to reverse its previous policy and open a branch office in Glasgow.

Early years

The bank appointed the successful businessman David Dale as its Glasgow cashier. Dale was already well known and respected in Glasgow for his commercial successes, charitable work and support for the community. He knew Glasgow, its people and its businesses. Such local knowledge was vital to the success of the new venture.

Alongside Dale the Bank appointed a joint cashier, Robert Scott Moncrieff. Scott Moncrieff was an experienced man of business who had previously held various government posts in Edinburgh. While Dale juggled his role with the Bank alongside his many other business interests, Scott Moncrieff soon took day-to-day responsibility for running the branch.

The branch first opened on 15 September 1783, initially in a corner of David Dale’s linen shop in Hopkirk’s Land on the High Street, near Glasgow Cross. Most of the earliest customers were merchants and businessmen, and it soon became clear that the branch’s core business would be in discounting bills of exchange. Before long, it was the largest centre of bill-discounting outside London. By 1800, the agency was discounting between 200 and 400 bills a day, and its bills at discount at any one time totalled £1m – a sum equal to the bank’s entire capital at that time. The business of the branch touched every area of commercial life in the city, financing canal building, ironworks, cotton manufacture, imports, exports and almost every trade in which Glasgow was involved.

In the late 1780s the branch moved from Hopkirk’s Land to larger premises in a house nearby, in St Andrew’s Square. This new home was, however, still too cramped. By 1802, more staff were desperately needed, but there was no space in the office for another clerk’s desk.

Early nineteenth century

By the beginning of the nineteenth century, the Bank was facing new competition. Bank of Scotland had been operating a Glasgow office since 1802. New banks were also being founded and treating success in Glasgow as a key business priority.

The first of these new banks to open a branch in Glasgow was Commercial Bank of Scotland, which was founded in Edinburgh in 1810. Trading from Glasgow was a key element of its business plan; even before its establishment, the promoters canvassed opinion among Glasgow’s merchants about how a new bank should be set up and what would make them do business with it. The branch opened just four years later, in 1814.

New premises

As Glasgow developed, its commercial heart shifted westwards, so that the area around the Cross was no longer the key place for merchants and bankers. To ensure that it remained close to its customers, in 1817 the Bank moved to a mansion in Queen Street. This building, subsequently much altered, now comprises part of the Museum of Modern Art.

A decade later, the bank moved again. The mansion and its adjoining property were sold to provide a site for the city’s Exchange, which also wished to move west from its former location in the Trongate. The Bank was aware, however, that the arrival of the Royal Exchange in the area made this an even more desirable location, so rather than leave it altogether, it bought a plot on what became Royal Exchange Square, and set about building new premises for its Glasgow branch.

The new building boasted a pedimented portico, fluted columns and flanking triumphal archways. Opened in 1834, it was a statement in stone-and-mortar that The Royal Bank of Scotland, unlike the newcomers around it, already had half a century of history in Glasgow.

Just over a decade later, in 1850, the Bank built a major new extension onto the back of its building on Royal Exchange Square. This addition brought the complex – known as ‘Royal Bank Buildings’ – up to the street-front on Buchanan Street, which by that time had become the city’s main shopping street. Part of the new building was used to accommodate the branch’s own expanding business, and the rest was rented out as shops and offices. The lane alongside was named ‘Royal Bank Place’, and remains so today.

Crisis and recovery

The 1850s brought more turbulent times, culminating in 1857 with the collapse of Western Bank of Scotland. This bank had been formed in 1832, and had from the outset pursued a vigorous lending policy backed by minimal reserves. It grew very rapidly, and by 1850 its branch network was by far the biggest in Scotland.

During the financial boom of 1857 Western Bank profited from the high demand for credit, but soon found itself overstretched, and had to cease trading. Customers lost nothing, but the bank’s shareholders lost their whole investment and became liable for the bank’s debts. There was concern that other Scottish banks would collapse in the ensuing crisis, but they all managed to pull through.

21 years later Scottish banking faced an even greater crisis, with the failure of City of Glasgow Bank. Every part of Scottish society was affected by this bank's collapse. Over 85 per cent of the bank’s shareholders were bankrupted by their obligation to pay the bank’s debts. Companies in Glasgow and around the world collapsed under the weight of the crisis. All the Scottish banks worked together to minimise its immediate impact, and in the longer term, new practices were adopted to restore public trust in businesses. For the first time, companies published detailed balance sheets and subjected their accounts to the scrutiny of independent auditors.

Despite these crises the second half of the nineteenth century was a time of growth for the banks in Glasgow. The city’s expanding heavy industrial sector led to economic development and an increasing population, and in consequence banks opened more branches in the city. By 1860, The Royal Bank of Scotland’s Royal Exchange Square branch had been joined by ones in Calton, Cowcaddens, Gallowgate and Hope Street. By 1870, there were 12 Glasgow branches and by 1883, when the Bank reached its centenary in the city, there were 19.

Into the twentieth century

In 1913, keen to improve access from Glasgow’s main thoroughfare on Buchanan Street, the Bank arranged to create a new entrance to its Royal Exchange branch, so that customers could enter the branch from either side. By the time work was complete the following year, however, the Bank, the city and all its citizens had more pressing concerns.

War broke out in 1914, bringing enormous new challenges to every community, workplace and family. 200,000 Glasgow men served in the armed forces during the war, including many bank workers. Many of the jobs they left behind were filled for the first time by women, and by the end of 1915 there were 11 ‘temporary lady clerks’ working in branches of The Royal Bank of Scotland across Glasgow. The numbers increased as the war progressed.

The 1920s and 1930s saw the opening of branches in new suburban districts around Glasgow. In 1934 the Bank opened a Foreign Department in Glasgow, supplying foreign exchange and other international services.

The return of war in 1939 brought more hardship. In the banks, reduced numbers of staff had to cope with increasing workloads. Banks planned carefully for the possibility of invasion, giving managers secret instructions for how to protect or destroy key assets in case of emergency evacuation or enemy occupation. To keep staff as safe as possible, branch basements were converted into air raid shelters. The shelter at The Royal Bank of Scotland’s Royal Exchange branch was equipped with hacksaws and pickaxes so that staff, if they found themselves trapped after a raid, could attempt to break out through the basement-level windows that faced onto Royal Exchange Place.

Post-war years

In the post-war era, banking in Glasgow and across Scotland underwent major change. In 1959, two of Scotland’s biggest banks – Commercial Bank of Scotland and National Bank of Scotland – united to create National Commercial Bank of Scotland. A decade later, in 1969, National Commercial merged with The Royal Bank of Scotland. All three banks had been strongly represented in Glasgow, and now all their branches traded under the banner of The Royal Bank of Scotland.

Regeneration

The regeneration of Glasgow city centre in the last years of the 20th century involved the redevelopment of the Royal Exchange Square area. In 1997 The Royal Bank of Scotland agreed to sell its longstanding flagship branch there, and moved around the corner to Gordon Street, to the building which had originally been Commercial Bank of Scotland’s chief Glasgow office. That branch, today known as City branch, had been built for the bank in the mid-1850s by the famous Scottish architect David Rhind. Today, it continues to sit at the hub of a network of retail branches across the Glasgow region.