Midland Bank

Former Threadneedle Street head office of The City Bank, which became London, City & Midland Bank

The Lutyens designed Midland Bank Head Office building, London.

The Lutyens designed 100 King Street, Manchester.

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.[3]

1967 letter to a customer, informing on the introduction of electronic data processing

In the 1830s and 1840s, Midland offered discounted bills of exchange for customers.[3] By the 1850s, the bank's customers included railways, iron founders and engineering concerns, utilities and municipal corporations.[3]

Midland acquired Stourbridge Old Bank in 1851 and Nichols, Baker and Crane of Bewdley in 1862.[3]

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 Bankers' Clearing House, in 1898 it bought the City Bank[3] (which provided a London head office) and, in 1914, it acquired the Birmingham Banking Company.[4]

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 twenty bank amalgamations between 1891 and 1918, and opened new branches throughout England and Wales.[3]

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.[3]

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.[3]

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).[3] In 1958, it acquired Forward Trust, which became a leader in installment finance, leasing and factoring services.[3]

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.[3]

Through the acquisition of Samuel Montagu & Co, Midland also gained a majority share in Guyerzeller Bank AG (now HSBC Guyerzeller Bank) in Switzerland.[3] 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.[3]

In 1974, Midland began 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, United States: 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.[3]

In 1980, Midland acquired a controlling interest in Trinkaus & Burkhardt KGaA, a private bank in Germany with a long history of its own, today HSBC Trinkaus.

In 1984, in a bid to grab market share Midland scrapped current account charges.[5][6] It was so successful that all other banks in the United Kingdom had to quickly follow and offer the same or risk losing their customers. The country has had free banking ever since.

The Hongkong and Shanghai Banking Corporation acquired a 14.9% equity interest in Midland Bank in 1987, and a strong working relationship developed. In October 1989, First Direct was established and was at the forefront of telephone banking, with person to person service available twenty four hours a day, 365 days a year.[3]

In June 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 on 1 January 1993, accepting primary banking supervision by the Bank of England.

Midland Bank was renamed HSBC Bank in June 1999, as part of the adoption of the HSBC brand throughout the Group.[3]

The last head office of the Midland Bank, opposite the Bank of England in Poultry and Princes Street, was sold in October 2006 to a tycoon from Russia, 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 Sir Edwin Lutyens.

Built between 1921 and 1939, and symbol of the 1930s pride of the biggest bank in the world, the building is currently (2015) under development as a hotel.[7]

HSBC UK swift code (all offices in the United Kingdom) being MIDLGB22 reflects its past as the Midland Bank.[8]