with the royal bank of scotland . bank of scotland plc banca na h alba type public limited company industry finance and insurance founded bank of scotland 17 july 1695 ; 321 years ago 1695 07 17 bank of scotland plc 17 september 2007 ; 9 years ago 2007 09 17 1 headquarters the mound edinburgh scotland united kingdom products financial services number of employees 20 000 parent lloyds banking group divisions halifax birmingham midshires intelligent finance clerical medical website www.bankofscotland.co.uk the bank of scotland plc scottish gaelic banca na h alba 2 is a commercial and clearing bank based in edinburgh scotland . with a history dating to the 17th century it is the fifth oldest surviving bank in the united kingdom the bank of england having been established one year before and is the only commercial institution created by the parliament of scotland to remain in existence . it was one of the first banks in europe to print its own banknotes and it continues to print its own sterling banknotes under legal arrangements which allow scottish banks to issue currency . in june 2006 the hbos group reorganisation act 2006 was passed by the parliament of the united kingdom allowing the bank s structure to be simplified . as a result the governor and company of the bank of scotland became bank of scotland plc on 17 september 2007 . bank of scotland has been a subsidiary of lloyds banking group since 19 january 2009 when hbos was acquired by lloyds tsb . contents 1 history 1.1 establishment 1.2 18th and 19th centuries 1.3 20th century 1.4 international expansion 1.5 hbos 1.5.1 formation of hbos 1.5.2 hbos reorganisation act 1.5.3 lloyds banking group 2 banknotes 2.1 banknote history 2.2 1995 series 2.3 current 2007 series 3 corporate structure 4 list of governors of the bank of scotland 5 sponsorship 6 see also 7 notes 8 external links history edit establishment edit bank of scotland crest head office the mound edinburgh the governor and company of the bank of scotland was established by an act of the parliament of scotland on 17 july 1695 3 the act for erecting a bank in scotland opening for business in february 1696 . although established soon after the bank of england 1694 the bank of scotland was a very different institution . where the bank of england was established specifically to finance defence spending by the english government the bank of scotland was established by the scottish government to support scottish business and was prohibited from lending to the government without parliamentary approval . 3 the founding act granted the bank a monopoly on public banking in scotland for 21 years permitted the bank s directors to raise a nominal capital of 1 200 000 pound scots 100 000 pound sterling gave the proprietors shareholders limited liability and in the final clause repealed only in 1920 made all foreign born proprietors naturalised scotsmen to all intents and purposes whatsoever . 3 john holland an englishman was one of the bank s founders . 3 its first chief accountant was george watson . 4 18th and 19th centuries edit golden statue of fame on top of the main dome bank of scotland head office edinburgh by john rhind the bank of scotland was suspected of jacobite sympathies . 3 its first rival the royal bank of scotland was formed by royal charter in 1727 . 3 this led to a period of great competition between the two banks as they set to drive each other out of business . 3 although the bank wars ended in around 1751 3 competition soon arose from other sources as other scottish banks were founded throughout the country . 3 in response the bank of scotland itself began to open branches throughout scotland . the first branch in london opened in 1865 . 5 the bank also took the lead in establishing the security and stability of the entire scottish banking system which became more important after the collapse of the ayr bank in 1772 6 in the crisis following the collapse of the london house of neal james fordyce and down . the western bank collapsed in 1857 and the bank of scotland stepped in with the other scottish banks to ensure that all western bank s notes were paid . 7 see credit crisis of 1772 . 20th century edit in the 1950s the bank of scotland was involved in several mergers and acquisitions with different banks . in 1955 the bank merged with the union bank of scotland . 8 the bank also expanded into consumer credit with the purchase of chester based north west securities now capital bank . 9 in 1971 the bank agreed to merge with the british linen bank 9 owned by barclays bank . the merger saw barclays bank acquire a 35 % stake in the bank of scotland a stake it retained until the 1990s . the merchant banking division of the bank of scotland was relaunched as british linen bank now known as hbos treasury services . in 1959 bank of scotland became the first bank in the uk to install a computer to process accounts centrally . 9 at 11 am on 25 january 1985 the bank introduced hobs home and office banking services an early application of remote access technology being made available to banking customers . this followed a small scale service operated jointly with the nottingham building society for two years but developed by bank of scotland . the new hobs service enabled customers to access their accounts directly on a television screen using the prestel telephone network . international expansion edit main article bank of scotland international the arrival of north sea oil to scotland in the 1970s allowed the bank of scotland to expand into the energy sector . the bank later used this expertise in energy finance to expand internationally . the first international office opened in houston texas followed by more in the united states moscow and singapore . in 1987 the bank acquired countrywide bank 9 of new zealand later sold to lloyds tsb in 1998 . the bank later expanded into the australian market by acquiring the perth based bank of western australia . 9 a controversial period in the bank s history was the attempt in 1999 to enter the united states retail banking market via a joint venture with evangelist pat robertson . the move was met with criticism from civil rights groups in the uk due to robertson s controversial views on homosexuality . the bank was forced to cancel the deal when robertson described scotland as a dark land overrun by homosexuals . 10 hbos edit main article hbos formation of hbos edit headquarters at north bank street edinburgh the street being named in honour of the bank moving there in 1806 . in the late 1990s the uk financial sector market underwent a period of consolidation on a large scale . many of the large building societies were demutualising and becoming banks in their own right or merging with existing banks . for instance lloyds bank and tsb bank merged in 1995 to create lloyds tsb . 11 in 1999 the bank of scotland made a takeover bid for the natwest bank . 12 since the bank of scotland was significantly smaller than the english based natwest the move was seen as an audacious and risky move . however the royal bank of scotland tabled a rival offer and a bitter takeover battle ensued with the royal bank the victor . 13 the bank of scotland was now the centre of other merger opportunities . a proposal to merge with the abbey national was explored but later rejected . 14 in 2001 the bank of scotland and the halifax agreed a merger to form hbos halifax bank of scotland . 15 the headquarters was to stay in edinburgh and both banks brands would continue to be used . hbos reorganisation act edit in 2006 hbos secured the passing of the hbos group reorganisation act 2006 a private act of parliament that would allow the group to operate within a simplified structure . the act allowed hbos to make the governor and company of the bank of scotland a public limited company bank of scotland plc which became the principal banking subsidiary of hbos . halifax plc transferred its undertakings to bank of scotland plc and although the brand name was retained halifax then began to operate under the latter company s uk banking licence . the provisions in the act were implemented on 17 september 2007 . 16 lloyds banking group edit in 2008 hbos group agreed to be taken over by lloyds tsb group . 17 banknotes edit see also banknotes of the pound sterling although the bank of scotland today is not a central bank it retains the right along with two other scottish commercial banks to issue pound sterling banknotes to this day . these notes are equal in value to notes issued by the bank of england the central bank of the united kingdom . banknote history edit along with the bank of england the bank of scotland was one of the first european banks to issue paper currency redeemable for cash on demand which was an extremely useful facility given the poor state of the scottish coinage at the end of the 17th century on a sustainable basis after the earlier failed attempt of the swedish stockholms banco in 1661 64 . following the acts of union in 1707 the bank supervised the reminting of the old scottish coinage into sterling . the right to issue banknotes was extended to other banks after 1716 when the bank of scotland s monopoly was allowed to lapse . citation needed up until the middle of the 19th century privately owned banks in great britain and ireland were permitted to issue their own banknotes and money issued by provincial scottish 18 english welsh and irish banking companies circulated freely as a means of payment . 19 while the bank of england eventually gained a monopoly for issuing banknotes in england and wales attempts to restrict scottish banks from issuing notes were met with popular opposition . in 1826 there was outrage in scotland at the attempt of the united kingdom parliament to prevent the production of banknotes of less than five pounds face value . sir walter scott wrote a series of letters to the edinburgh weekly journal under the pseudonym malachi malagrowther which provoked such a response that the government was forced to relent and allow the scottish banks to continue printing 1 notes . for this reason sir walter still appears on all bank of scotland notes . citation needed 1995 series edit the tercentenary series 50 note 1995 bank of scotland s previous note issue was in 1995 known as the tercentenary series as they were issued in the year of the three hundredth anniversary of the foundation of the bank . each denomination features sir walter scott on the front and on the back are representations of industries that scotland excels in 5 note featuring a vignette of oil and energy 10 note featuring a vignette of distilling and brewing 20 note featuring a vignette of education and research 50 note featuring a vignette of arts and culture 100 note featuring a vignette of leisure and tourism . these notes continue in circulation and are gradually being replaced by the 2007 series . current 2007 series edit a 20 note of the 2007 issue . bank of scotland began issuing a new series of banknotes in the autumn of 2007 which feature the common theme of scottish bridges . 20 it will take at least three years for the current issue of bank of scotland notes to be phased out of circulation . in keeping with the bank s tradition the front of the notes