The Liverpool Union Bank was established in May 1835. It was set up to serve the needs of local merchants and brokers associated with the Port of Liverpool. This trade formed the majority of the Bank’s business for its first 50 years.
The Liverpool Union was cautious in outlook, and maintained a prudent reserve policy. This stood it in good stead. It survived the mid-19th century banking crises, which saw many regional banks fail. Such was its conservative nature that the Bank did not open its first branch until 1877. However, by 1899 it had 14 branches, stretching from Chester to the Isle of Man.
By the turn of the century, the Bank was struggling to compete with larger rivals that had emerged from a series of amalgamations. Its volume of lending had outstripped the pace of deposits, and it had been forced to close two of its branches. It was, therefore, unable to resist the approaches of Lloyds. The two banks already had a strong relationship – Lloyds Bank had held the Liverpool Union's London account for many years.
The takeover was completed in 1900. As a result, Lloyds established a strong presence in Liverpool, and inherited some influential merchants and brokers as customers.
One of the Liverpool Union's senior managers at the time was Henry Bell. Bell, a former England rugby international, was a highly respected banker. He went on to become Lloyds’ General Manager (equivalent of today’s Chief Executive) in 1912. During the First World War, he advised the government on its dealings with the banks, and went on to represent it at various post-war financial conferences.