Saturday, February 26, 2011

British Linen Bank

The British Linen Bank was a commercial bank with its headquarters in Edinburgh.

The Bank has its roots in the creation of the British Linen Company, which was formed in 1746 by a Royal Charter from King George II. Although a Scottish organisation, the prefix "British" was used instead of "Scottish" due to the suspicion aroused by all things Scottish following the Jacobite Rebellion of 1745. The initial aim of the company was to promote the linen industry, although from the late 1760s it moved into banking and issued its first notes in 1747. The great strength of the British Linen Company was its spread of agents throughout the country, developed as a result of the company's earlier involvement in the linen trade. By 1780 there were nine branches throughout Scotland.

In 1906 the British Linen Company formally changed its name to the British Linen Bank. In 1919 it was acquired by Barclays Bank, although it retained a seperate board of directors and continued to issue its own bank notes.

British Linen Bank coat of arms, granted 1934

In 1969, the Bank of Scotland agreed to a deal with Barclays to acquire the British Linen Bank, with Barclays taking a 35% stake in the enlarged bank. The merger with the Bank of Scotland was finalised following the Bank of Scotland Confirmation Act 1970, confirming the transfer of the assets and liabilities of British Linen Bank to the Bank of Scotland. The Act allowed the British Linen Bank to continue as a seperate company, and in 1977 the Bank resumed as the merchant bank arm of the Bank of Scotland.

In 1999 the Bank of Scotland decided to stop using the British Linen Bank name, renaming its merchant bank activities as Bank of Scotland Treasury Services (later HBOS Treasury Services). In April 2000, the British Linen Bank finally closed down its headquarters in Edinburgh.

By Mark Matlach

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