Bank of London & South America (BOLSA)
Lloyds Bank’s origins in South America date from 1862, with the formation of both the London & River Plate Bank and the London & Brazilian Bank. These two companies were established to provide banking facilities for the growing mercantile trade that dominated British interests in South America.
Both had head offices in London, and were financed primarily by British investors.
The London & River Plate Bank pioneered British joint-stock banking in Latin America. Manager J. H. Green left England in 1862, to set up the company’s first branch office in Buenos Aires. All he took with him were two boxes of gold doubloons, some account books and letters of credit. On arrival in the Argentinean capital, Green sought permission from the President to open the office. This was granted, along with the Bank’s right to issue its own notes. Business began in January 1863. One month later, the London & Brazilian Bank opened its first branch, in Rio de Janeiro.
Early Struggles and Expansion
The London & Brazilian Bank struggled during its early years. This was largely due to major economic downturns affecting both London and Brazil in the mid-1860s. However, it and its counterpart in Argentina went on to expand in the 1870s and '80s. They helped finance the burgeoning Latin American trade with Europe and North America. Loans were also provided to improve the infrastructure of their host nations; each bank was heavily involved in financing the building of railways across South America.
In 1890, a crippling financial crisis hit Argentina. It is estimated that some three quarters of the country’s banking capital was lost. However, the London & River Plate was one of the few banks to remain open throughout this period. It played a key role in maintaining public confidence in the country’s financial systems. In fact, its own business actually increased.
During the First World War, both companies financed the Allied trade with South America. However, deposits fell and their debts increased.
Lloyds Bank acquired control of the London & River Plate in 1918. In 1923, it also took a controlling stake in the London & Brazilian Bank. Later that year, the two Latin American banks merged to form the Bank of London & South America, or BOLSA as it was more commonly known. Further expansion occurred in 1936, when BOLSA took over the Anglo-South American Bank. For the next half-century, the Bank continued to expand. It prospered in a continent that was undergoing major upheavals, both economic and political. It helped finance a rapidly industrialising South America.
In 1960, BOLSA merged with merchant traders Balfour, Williamson & Co., consolidating their already close relationship. In May 1971, Lloyds Bank rationalised its international operations by merging BOLSA with its European counterpart, Lloyds Bank (Europe) . The new subsidiary was initially called Lloyds & Bolsa International, but later renamed Lloyds Bank International (LBI). LBI was absorbed into the main business of Lloyds Bank in 1986.
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