The Hampshire & North Wilts Banking Company, as Capital & Counties Bank was originally known, was formed in 1877. It was a result of a merger between two already well-established joint-stock banks, the Hampshire Banking Company and the North Wilts Banking Company. The new bank was renamed Capital & Counties in 1878, the directors having decided that they wanted a less provincial title.
The newly merged bank had its head office in Southampton and 56 branches throughout the south and south-west of England. The next half century saw further expansion, mainly under the direction of Edward Bavistock Merriman. He was the bank’s chairman between 1885 and 1915. In 1878, in an attempt to gain entry into the London Bankers Clearing House, Capital & Counties purchased City of London bank Willis, Percival & Co. Membership of the Clearing House was deemed important as it was an acknowledgement that a bank had really arrived in London. Several of Capital & Counties’ applications failed, but it was eventually accepted as a member a few years later. Soon after, it moved its head office to Threadneedle Street in London.
The Bank continued to expand through a series of takeovers and branch openings; at the start of the 1890s it had emerged as one of the few banks to have a truly nationwide network. By 1918 it had 473 branches.
Capital & Counties had continued to operate very much like a 19th century bank well into the 20th century. As a result, it was starting to lose its competitive edge. When Lloyds Bank offered to take it over in 1918, the Bank recognised the benefits that the merger would bring. This was by far Lloyds’ biggest takeover to-date, and was reflected in the fact that seven directors of the Capital & Counties board went on to join the Lloyds board.
The process of merging these two large banks was a difficult one. The two companies operated different book-keeping methods, which meant that integration took time. The recruitment of staff also continued independently and it was not until 1934 that the Capital & Counties Committee of Directors ceased operating as a separate entity.