 | |
| Company type | Statutory corporation (1968) Public limited company (1988) |
|---|---|
| Industry | Financial services |
| Founded | 1968; 57 years ago (1968) |
| Defunct | 2003 |
| Fate | Privatised |
| Successor | Alliance & Leicester |
| Headquarters | Bootle, Merseyside |
| Products | Postal giro, retail banking |
National Girobank was a British public sector financial institution run by theGeneral Post Office that opened for business in October 1968.[1] It was initially calledNational Giro [2][3] thenNational Girobank and finallyGirobank plc, before being absorbed intoAlliance & Leicester in 2003.[4]
It was the first bank in Europe to adoptOCR (optical character recognition) technology;[5] the first bank to offer interest-bearing current accounts,[4] and the first in Europe to offertelephone banking.
In 1959, theRadcliffe Committee set up to investigate the "Working of the Monetary System in the United Kingdom" recommended the introduction of agiro system, and said that if the main banks did not do this, the possibility of the Post Office introducing it should be investigated.[6][7]
In 1965 a white paper "A Post Office Giro" was published, outlining a system which would use post offices as its business outlets, with automated central processing of transactions.[6]
By September 1965, a central site was chosen atBootle in Lancashire.[6] The Post Office bought land on the site ofsidings of theNorth Mersey Branch railway. It also built a large, purpose built office anddata processing complex for the site, completed in March 1968.[6] The National Giro was the first financial institution in Europe, and probably the world, to be established from the outset to be fully computerised.[8]
The early years of National Giro were unprofitable.[7] In 1969 National Giro partnered with theMercantile Loan Company to provide loans to account holders, which was a significant stimulation of account growth.[8][9] When aConservative government came to power in 1970, there were pressures on the government to close the still loss-making operation.[8][9] The government, with the advice of consultantsCooper Brothers, gave its approval to a continuation plan. However, charges were doubled for the majority of customers, the 'same day' service was changed to a 'next day' service, and staffing was reduced from 3,500 to 3,000.[8][9]
By the late 1980s, Girobank was Britain's sixth largest bank.[1]
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TheAlliance & Leicester won a bidding process for the Girobank operation in 1989 after theConservative governmentprivatised the bank, as part of a programme ofsales of state-owned businesses. The transaction was completed in 1990 and by this time the bank was essentially indistinguishable from its competitors, apart from its use of post offices to transact cash business. The contract with the Post Office was to continue to be an exclusive one for a fixed period after privatisation. After privatisation, the bank expanded and opened a £9.5 million operations centre inWigan.[10]
The personal banking business of Girobank became part of the Alliance & Leicester Building Society. The Business Banking arm continued to use the Girobank name as a wholly owned subsidiary of the Alliance and Leicester, repositioned as a cash handler and credit card processor for retailers and other banks.[11][4] In 2003 the Girobank brand was dropped, with the business renamed Alliance & Leicester[4] following further consolidation in the Alliance & Leicester group. In May 2010, Alliance & Leicester was acquired byGrupo Santander and the Alliance & Leicester brand was replaced bySantander UK.
The Girobank wording continued in use on some credit slips intended for paying bills, along with the Alliance & Leicester "plus" logo. Some councils were continuing to use the original name "Post Office Giro" in 2011.[12][13][14]
In March 2009, a campaign was launched to bring back Girobank. Backers included MPs, trade unions and small businesses.[15]
Post Office Limited now provides cash services to many banks on a commercial basis.[citation needed] In April 2013, the Post Office announced it would be launching a retail banking service accessible through Post Office branches under thePost Office Money brand,[16] now run by theBank of Ireland.
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