The listening bank
|Public limited company|
|Fate||Acquired by HSBC Holdings|
|Successor||HSBC Bank Plc|
|Founded||Birmingham in 1836|
|Headquarters||27 Poultry, London, EC2|
|Products||Banking and insurance|
Midland Bank Plc was one of the Big Four banking groups in the United Kingdom for most of the 20th century. It is now part of HSBC. The bank was founded as the Birmingham and Midland Bank in Union Street, Birmingham, England in August 1836. It expanded in the Midlands, absorbing many local banks, and merged with the Central Bank of London Ltd in 1891, becoming the London City and Midland Bank.
After a period of nationwide expansion, including the acquisition of many smaller banks, the name Midland Bank Ltd was adopted in 1923. By 1934 it was the largest deposit bank in the world. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but in 1992 it was taken over by HSBC Holdings plc, who phased out the Midland Bank name in 1999 in favour of HSBC Bank.
Midland Bank was founded by Charles Geach, its first manager in Union Street, Birmingham, England, in August 1836. Geach had formerly worked at the Bank of England; he secured the business support and capital backing of leading merchants and manufacturers in Birmingham.
In the 1830s and 1840s, Midland occupied an important niche in Birmingham business, particularly in the discounting of bills of exchange for its customers. Links with local industrial and commercial concerns were especially strong and, by the 1850s, the bank’s customers included railways, iron founders and engineering concerns, utilities and municipal corporations.
Midland acquired Stourbridge Old Bank in 1851 and Nichols, Baker and Crane of Bewdley in 1862. Both firms had been pioneers of banking in the West Midlands: the origins of the Stourbridge bank can be traced back to 1762 and the Bewdley bank dated from 1777.
Acquisitions and development in its first 50 years
From the 1880s, it expanded its customer base by opening new branches and acquiring other banks. In 1891 it acquired the Central Bank of London (which gave Midland a seat in the London Clearing House) and, in 1898, it bought the City Bank (which provided a London head office).
By 1918, with deposits of £335 million, it ranked as the largest bank in the world. Edward Hopkinson Holden led the bank at this time first as Managing Director from 1898 to 1908 and then as Chairman and Managing Director from 1908 until his death in 1919. He oversaw more than 20 bank amalgamations between 1891 and 1918, and opened new branches throughout England and Wales.
Holden also expanded overseas; it was the first British bank to set up a foreign exchange department and, by 1919, it was acting as London bank to some 650 correspondent banks throughout the world. From 1907, these correspondents included The Hongkong and Shanghai Banking Corporation.
After the First World War, the leading British banks entered an agreement with the government that they would not attempt further amalgamations without Treasury approval. As a result, Midland turned its attention to expanding its branch network, adding new banking services, mechanising its systems (from 1928) and advertising its activities.
Post-war recovery and international alliances
Midland responded to the ending of credit restrictions in 1958 by extending its branch network and by introducing a series of innovative services, including personal loans (1958), personal cheque accounts (1958) and cheque cards (1966).
In 1958 it acquired Forward Trust, which became a leader in installment finance, leasing and factoring services.
In 1967 Midland acquired a share in Montagu Trust, the owner of Samuel Montagu & Co., and thereby became the first British clearing bank to own a London merchant bank. Samuel Montagu, with its own history dating back to 1853, became a wholly owned subsidiary in 1974 and is now part of HSBC's private banking business. Through the acquisition of Samuel Montagu & Co, Midland also gained a majority share in Guyerzeller Bank AG (now HSBC Guyerzeller Bank) in Switzerland.
Further diversification followed in 1972, when Midland was the leading member of the consortium that acquired the Thomas Cook travel business. After becoming sole owner in 1977, Midland sold its interest in 1992.
In 1974 Midland started to open branches or representative offices in overseas countries and to acquire other international banks. The largest of these was the purchase of a majority share in Crocker National of California, USA: this was not a success and Midland was forced to take full ownership in 1985 so that it could sell it to Wells Fargo the following year.
Midland joins the HSBC Group
The Hongkong and Shanghai Banking Corporation acquired a 14.9% equity interest in Midland Bank in 1987, and a strong working relationship developed. In 1989 First Direct was established and was at the forefront of telephone banking, with person-to-person service available 24 hours a day, 365 days a year.
In 1992, HSBC Holdings plc acquired full ownership of Midland Bank. At the time it was one of the largest acquisitions in banking history, and gave HSBC a major foothold in Europe, which it needed to complement its existing business in Asia and the Americas, when it had to move its Hong Kong-based headquarters to London in 1 January 1993, accepting primary banking supervision by the Bank of England. Midland Bank was renamed HSBC Bank in 1999 as part of the adoption of the HSBC brand throughout the Group.
The last head office of the Midland Bank, opposite the Bank of England in Poultry and Princes Street, was sold in 2006 to a Russian tycoon, with HSBC vacating the banking hall on the ground floor and huge underground deposit vaults in 2007. The ground floor is now used in the Channel 4 game show The Bank Job. The architect John Alfred Gotch designed the building. with assistance from Edwin Landseer Lutyens. Built between 1921 and 1939, and symbol of the 1930s pride of the biggest bank in the world, the building eventually became a hotel.
The Midland Bank was famous for its golden griffin logo, surrounded by golden coins originally introduced in 1965 on a black, then later blue background, and for its slogan "the listening bank," written by the advertising executive Rod Allen.
Advertisements for the bank appeared in the popular Theme Park computer game.
The Midland Bank still traded as Midland Bank but using the HSBC logo from 1997, and was finally rebranded as HSBC Bank in 1999, as part of the adoption of the HSBC brand throughout the group. However, a dormant subsidiary, Midland Bank (Branch Nominees) Limited, continues to be registered at Companies House.
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