Western Bank of Scotland was formed in Glasgow in 1832 with an initial paid-up capital of £210,000. It immediately embarked upon a vigorous lending policy with minimal liquid reserves and by 1834 the bank had consequently run into difficulties. It was supported by a £100,000 loan from the major Edinburgh banks on condition that its lending policy was modified. Western Bank of Scotland also pursued an ambitious policy of branch opening, setting up 23 branches in the 1830s and 49 in the 1840s. By 1850 it had 72 branches; far more than any other Scottish bank. In 1843 it acquired the business of the failed Greenock Banking Co. In 1844 it acquired Dundee Union Bank and in 1845, both Paisley Commercial Bank and Ayrshire Banking Co.
In 1847 it was again in difficulty due to excessive lending and was rescued by a £300,000 Bank of England loan. By 1857 Western Bank of Scotland was the second largest bank in Scotland after the Royal Bank of Scotland. It had a paid-up capital of £1.5m, £5.3m deposits, 1,280 shareholders and 101 branches.
In 1857, during a general financial panic, Western Bank of Scotland collapsed, the victim of bad management and of the failure of three major customers owing almost £1.2m. The shareholders lost all their paid-up capital of £2m and had to provide an additional £1.1m to meet the bank's liabilities. A number of the bank's branches were taken over by other banks, including the Royal Bank of Scotland.
Branches: The bank opened 101 branches and sub-branches between 1832 and 1857 throughout Scotland.
- How to Mismanage a Bank: A Review of the Western Bank of Scotland (Edinburgh: Adam & Charles Black and John MacClaren, 1859)
- R H Campbell, ‘Edinburgh Bankers and the Western Bank of Scotland’, Scottish Journal of Political Economy, 1955, vol.2, p.133-148
- SG Checkland, Scottish Banking: A History, 1695-1973 (Glasgow: Collins, 1975)
- J Eunson, ‘The Western Bank of Scotland, 1832 to 9th November 1857’, Scottish Bankers’ Magazine, 1983, vol.74, p.148-149
- I C MacSween, ‘The Western Bank of Scotland, 1832-1857’, Scottish Bankers’ Magazine, 1957, vol.49, p.78-88
- S Neave Et al., The Western Bank Failure and the Scottish Banking System (Glasgow: John Bain, 1858)
Summary of our archive holdings
Our archival records of Western Bank of Scotland have the reference code WB.
For help understanding words used here, check our glossary of banking record types (PDF 68 KB).
- statistical summaries of the business 1832-57
- correspondence with Bank of Scotland 1834-8
- correspondence with agents: Greenock 1842, Lockerbie 1858
- various branch records 1854-7
- circular re suspension of payment 1857
- register of shareholders 1857
- list of partners 1858
Summary of archive holdings elsewhere
- Glasgow University Archive Services: Partnership records 1831-57; branch architectural drawings 1845-58; papers re failure 1858-63 (Ref: UGD 84); report of the liquidators 1870 (Ref: UGD 129/4/2)
- National Library of Scotland: Letters, accounts and presscuttings 1850-60 (Ref: Adv.MSS 21.1.13-14)
- Lloyds Banking Group Archives: Bills received, negotiations etc 1857-8 (Ref: 19/1/1-3)
- National Register of Archives (Scotland): Letters and accounts re Western Bank and its failure 1850-63 (Ref: NRA(S) 0139); passbook, correspondence and papers re Western Bank failure 1830-70 (Ref: NRA(S) 2408). Papers privately held, contact National Register of Archives (Scotland) for further information