BOLSA (Bank of London & South America) records

Scope and Content

Records of the Chief Accountant, Directorate, Economic Intelligence Department, Investment Committee, Secretary's Department and Securities Department. Also includes records of staff and general management, and records on the establishment, operation and amalgamation of the London & River Plate Bank.

Administrative / Biographical History

Bank of London & South America (1862-1971)

Foundation

Lloyds Bank's origins in South America go back to 1862 when both the London & Brazilian Bank and the London & River Plate Bank were formed. The banks were founded in order to provide banking facilities for the growing mercantile trade that dominated British interests in South America. Both had head offices located in London and were financed primarily by British investors.

The first branch manager of the London & River Plate Bank was J. H. Green. In 1862 he left England to open the bank's first branch in Buenos Aires. All he was equipped with to accomplish his task were two boxes of gold doubloons, a few account books and letters of credit, which would allow him to raise money on arrival, enabling him to set up the branch. When he finally arrived in the Argentine capital he sought the president's permission to open a branch. This was granted, along with the ability for the bank to issue its own notes. He was able to open the Buenos Aires branch on 1 January 1863. It would be the first British joint-stock bank ever to operate in Latin America. One month after the opening at Buenos Aires, the London & Brazilian Bank opened its first branch in Rio de Janeiro.

Early struggles and expansion

The London & Brazilian Bank struggled in its early years. Severe monetary crises in both London and Brazil in the mid 1860s posed serious problems for the sustainability of the bank. Luckily it was able to weather these difficult times and each of the two banks went on to expand in subsequent decades. Not only did they assist in the financing of the burgeoning Latin American trade with Europe and North America, but they also provided loans to finance the improvement of the infrastructure of their host nations. Each bank was heavily involved in the provision of loans and the sale of bonds to finance the building of railways across the continent.

The London & River Plate Bank was, by 1890, strong enough to withstand a crippling financial crisis that hit Argentina. During this crisis the nation's national banks were forced to close their doors and suspended payments. It has been estimated that three quarters of Argentina's banking capital was lost in the crisis. The London & River Plate bank was one of the only banking institutions in the country to remain open, and it played a very important role in maintaining public confidence. Throughout the year, its business actually increased.

Both banks were to open international branches towards the end of the 19th century, ensuring that their representation stretched from South America, Britain and Continental Europe. During the First World War the banks worked to finance much of the allied trade with South America. However, the war-time economy took its toll on both banks, with deposits falling and increasing debts being accumulated onto their balance sheets. Yet both banks emerged from the war in tact and resumed the expansion of their branch network across South America. However, by this stage the London & River Plate Bank was no longer independent, having had the majority of its shares bought by Lloyds, one of the 'big five' British clearing banks, in 1918.

Formation of BOLSA

The expansion of both of the banks' branch networks meant that for the first time the two banks were competing against each other in many towns. This increased rivalry and over-representation was not sustainable. However, before they were forced to engage in heavy competition against each other, the two banks were brought together by Lloyds Bank. In 1923 Lloyds, already a controlling partner in the London & River Plate Bank, took a stake in the London & Brazilian Bank. Following Lloyds' involvement in both banks, it encouraged the two to merge. In 1923 they merged to form the Bank of London & South America (BOLSA). Lloyds retained a significant stake, but did not own the bank in its entirety. In 1936 BOLSA further increased its representation on the South American continent by absorbing the struggling Anglo-South American Bank.

For the next half-century the bank continued to grow. It survived the restrictions placed on its business operations by the Second World War, coped with the social changes that swept through the continent, and ensured that it was able to offer finance for the rapidly industrialising South American nations and their growing populations. In 1960 the bank consolidated its close relationship with merchant traders by amalgamating with the well-known British merchant firm of Balfour, Williamson & Co.

BOLSA's full integration into Lloyds came in 1971. In this year Lloyds Bank bought a controlling interest in BOLSA and merged it with Lloyds Bank Europe to form Lloyds & BOLSA International Bank, a title which changed in 1974 to Lloyds Bank International (LBI). LBI was absorbed into the main business of Lloyds Bank in 1986.

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