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Friday, September 24, 1999 Published at 12:16 GMT 13:16 UK


UK: Scotland

Bold move by ambitious bank

The Bank of Scotland is the UK's oldest clearing bank

The Bank of Scotland's £20.8bn bid for the NatWest - a move which if successful would create the biggest bank in the UK - is the latest chapter in the institution's 300-year history.

Established by an Act of the Parliament of Scotland on 17th July 1695, the Bank of Scotland is the oldest surviving UK clearing bank, and the only commercial institution created by the Scots Parliament still in existence.

It was set up principally to improve Scottish trade with England and the Low Countries, comprising 172 shareholders drawn mainly from the country's political and merchant elite.

There have been various "firsts" in the Bank's history, notably that of being the first bank in Europe to successfully issue paper currency, instantly redeemable for cash, in the late 17th Century.

Growing company

By the end of the 18th Century, the bank had established a network of offices throughout the country.

The 20th Century has been one of radical changes with the difficulties of war requiring the bank to re-focus its priorities to the public.

It was also heavily involved in the financing of the North Sea oil industry as it emerged in the late 1960s.

Recent events have soured the bank's image though, with an ill-thought out relationship with right-wing US evangelist Dr Pat Robertson forcing its bosses into an embarrassing climb-down.

A proposed joint venture between the bank and Robertson Financial Services, to facilitate an international telephone banking programme, angered many of the bank's customers, as well as equal rights campaigners.

Public outcry

Dr Robertson's views on gays, women and liberals were considered by many to be unacceptable and the public outcry prompted him to label Scotland as a "dark land" over-run by homosexuals.

Following threats by customers, including the Scottish Trades Union Congress and the Scottish Parliament, to close accounts with the bank, crisis talks took place in Boston between the parties.

The Bank of Scotland severed its links with Dr Robertson, at a reported cost of around £2m to the bank, which insisted it would pursue its efforts to expand its operation throughout the world.

The bid for NatWest is seen as another attempt at 'consolidation' in the European financial sector as the Bank of Scotland attempts to gain a secure footing following the introduction of the single European currency.



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