The firm of Taylors & Lloyds opened as a private bank in Birmingham, in June 1765. It was founded by John Taylor, Sampson Lloyd and their two sons. Taylor was a Unitarian and a cabinet maker, Lloyd a Quaker and iron founder. The bank they established was one of the first in Birmingham. It was essentially a town bank, with a strong manufacturing and mercantile customer base.
Under the prudent eyes of successive partners, the business prospered for nearly 100 years from a single office. During this period, Birmingham became the powerhouse of the Industrial Revolution, and was known as the ‘workshop of the world’. Taylors & Lloyds played a prominent role in financing trade and industry in the town. The bank was particularly active in the manufacturing and engineering sectors.
Becoming a Joint-Stock Bank
The association with the Taylor family ended in 1852, when John Taylor’s great-grandsons opted for the life of country gentlemen, in preference to banking. The firm's name was changed to Lloyds & Company.
New legislation, coupled with a need for increased capital, led Lloyds to convert from a private bank to a joint-stock company in 1865. Its name changed once again; it was now Lloyds Banking Company Limited.
The move was part of a general trend in banking, and provided Lloyds with a much broader financial base. Instead of being run by the firm’s three partners, the bank now had a board of directors. These included not only members of the Lloyd family, but other prominent local businessmen too. Among these was a young Joseph Chamberlain. He went on to become Mayor of Birmingham, an MP and a member of William Gladstone’s Cabinet. He was also the father of future Prime Minister, Neville Chamberlain.
Explosion of Growth
The conversion to joint-stock status resulted in an explosion of growth. More than 200 banks were taken over, directly and indirectly, in the next 50 years. In the 1880s, Lloyds, already a powerful force in the Midlands, turned its attention to London. In 1884, it absorbed the Lombard Street bank of Barnetts, Hoares,& Co. This acquisition is of particular significance because it brought about the connection with the black horse.
Although this symbol had most recently been used by Barnetts, Hoares & Co., its origins date back much further: the sign of the black horse was first recorded as hanging above the shop of Humphrey Stocks, a Lombard Street goldsmith, in 1677.
Other important London takeovers included that of Twinings Bank, in 1892. This had grown out of the world-famous Twinings Tea Company.
The following year, Lloyds acquired Herries, Farquhar & Co. which, in the late 18th century, had invented the traveller’s cheque.
Change in the 20th Century
The first half of the 20th century marked a period of significant change for Lloyds, on many different levels. It continued its domestic growth, taking over banks large and small; it began its expansion overseas; its workforce changed beyond recognition, with the employment of women in large numbers during the First World War; and its accounting systems, largely unchanged since the 17th century, were transformed by mechanisation.
In 1918, Lloyds undertook what was to be its biggest takeover until the merger with TSB, some 80 years later.
It acquired Capital & Counties Bank. This latter was itself the result of the amalgamation of two banks, the Hampshire Banking Company and the North Wilts Banking Company. Through the takeover, Lloyds gained an additional 473 branches – an increase of 53%.
This secured Lloyds' position as one of the ‘Big Five’ high street banks.
Two more significant acquisitions followed. In 1921, Lloyds took over the Somerset bank of Fox, Fowler & Co. This was the last provincial bank in England and Wales to issue its own banknotes, which it had done continuously since 1787. It only ceased with the takeover. The second acquisition, in 1923, was that of army agency Cox’s & King’s.
Previously known as Cox & Co., this firm served as banker to the armed forces. During the First World War it had engaged in massive expansion. Its main office in Charing Cross, London, also stayed open 24 hours a day. This allowed officers returning to and from the Front to cash cheques, at any time of the day or night.
In 1911, Lloyds ventured overseas for the first time. It acquired the firm of Armstrong & Co., which had offices in Paris and Le Havre. This formed the basis of what later became Lloyds Bank Europe. Seven years on, branches in Argentina were acquired with the takeover of the London & River Plate Bank. Lloyds merged this latter with the London & Brazilian Bank, in 1923, forming the Bank of London & South America (BOLSA).
Lloyds rationalised its overseas operations in 1971, by merging these international subsidiaries. The integration of the two businesses, one covering Europe and the other South America, was a major undertaking. Lloyds Bank International, as it later became, was absorbed into Lloyds Bank itself in 1986.
Foreign Exchange Manager, 1920
Mechanisation of branch accounting procedures had begun in the late 1920s, but wasn’t completed until 1962. Just one year later, Lloyds took its next giant step and installed its first computer in a branch. In 1972, the first Cashpoint machine was installed, in Brentwood, Essex. The early Cashpoints were very similar to today’s ATMs. All the machines were online, issued variable amounts of cash and immediately debited the amount from the customer's account.
The Cheltenham & Gloucester Building Society joined Lloyds Bank in August 1995. This was the first ever association between a bank and a building society. Later that year, Lloyds merged with TSB to create what was, at that time, the largest force in UK domestic banking.
The Lloyds Bank brand reappeared on the high street in 2013, when Lloyds TSB once again became two separate banks. This followed a European Commission ruling in 2009 which required the Group to divest part of its business. More than 630 branches across Britain were brought together to form the new TSB.
Lloyds Bank 250th Anniversary
In 2015, Lloyds Bank marked its 250th anniversary - one of a number of important anniversaries that took place in Lloyds Banking Group that year.
A special publication about the history of Lloyds was produced. A digital copy is available to download in the '250 Years of Lloyds Bank' section of our website.