National Girobank was a British public sector financial institution run by the

General Post Office The General Post Office (GPO) was the state postal system and telecommunications carrier of the United Kingdom until 1969. Established in England in the 17th century, the GPO was a state monopoly covering the dispatch of items from a specific ...

that opened for business in October 1968. It was initially called ''National Giro'' then ''National Girobank'' and finally ''Girobank plc'', before being absorbed into

Alliance & Leicester Alliance & Leicester plc was a British bank and former building society, formed by the merger in 1985 of the Alliance Building Society and the Leicester Building Society. The business Demutualisation, demutualised in the middle of 1997, when ...

in 2003. It was the first bank in Europe to adopt OCR (optical character recognition) technology; the first bank to offer interest-bearing current accounts, and the first in Europe to offer

telephone banking Telephone banking is a service provided by a bank or other financial institution that enables customers to perform over the telephone a range of financial transactions that do not involve cash or financial instruments (such as checks) without the ...

History

Background

In 1959, the Radcliffe Committee set up to investigate the "Working of the Monetary System in the United Kingdom" recommended the introduction of a giro system, and said that if the main banks did not do this, the possibility of the Post Office introducing it should be investigated.

Planning for the National Giro

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. By September 1965, a central site was chosen at

Bootle Bootle (pronounced ) is a town in the Metropolitan Borough of Sefton, Merseyside, England, which had a population of 51,394 in 2011; the wider Bootle (UK Parliament constituency), Parliamentary constituency had a population of 98,449. It is pa ...

in Lancashire. The Post Office bought land on the site of sidings of the

North Mersey Branch The North Mersey Branch (NMB) is a railway line that was constructed by the Lancashire and Yorkshire Railway to connect its mainline (the former Liverpool and Bury Railway) with the northern Mersey dock system. History The Lancashire and York ...

railway. It also built a large, purpose built office and

data processing Data processing is the collection and manipulation of digital data to produce meaningful information. Data processing is a form of ''information processing'', which is the modification (processing) of information in any manner detectable by an o ...

complex for the site, completed in March 1968. The National Giro was the first financial institution in Europe, and probably the world, to be established from the outset to be fully computerised.

Operations

The early years of National Giro were unprofitable. In 1969 National Giro partnered with the

Mercantile Loan Company Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. Traders generally negotiate through a medium of credi ...

to provide loans to account holders, which was a significant stimulation of account growth. When a

Conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...

government came to power in 1970, there were pressures on the government to close the still loss-making operation. The government, with the advice of consultants Cooper 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. By the late 1980s, Girobank was Britain's sixth largest bank.

Privatisation and beyond

The

won a bidding process for the Girobank operation in 1989 after the

Conservative government Conservative or Tory government may refer to: Canada In Canadian politics, a Conservative government may refer to the following governments administered by the Conservative Party of Canada or one of its historical predecessors: * 1st Canadian Min ...

privatised Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation wh ...

the bank, as part of a programme of sales 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 in

Wigan Wigan ( ) is a town in Greater Manchester, England. The town is midway between the two cities of Manchester, to the south-east, and Liverpool, to the south-west. It is the largest settlement in the Metropolitan Borough of Wigan and is its ad ...

. 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. In 2003 the Girobank brand was dropped, with the business renamed Alliance & Leicester following further consolidation in the Alliance & Leicester group. In May 2010, Alliance & Leicester was acquired by

Grupo Santander Banco Santander S.A. trading as Santander Group ( , , ), is a Spanish multinational financial services company based in Santander, with operative offices in Madrid. Additionally, Santander maintains a presence in most global financial centres ...

and the Alliance & Leicester brand was replaced by

Santander UK Santander UK plc (, ) is a British bank, wholly owned by Banco Santander, a Spanish bank. Santander UK plc manages its affairs autonomously, with its own local management team, responsible solely for its performance. Santander UK is one of th ...

. 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. In March 2009, a campaign was launched to bring back Girobank. Backers included MPs, trade unions and small businesses.

Successors

Post Office Limited Post Office Limited, formerly Post Office Counters Limited and commonly known as the Post Office, is a state-owned retail post office company in the United Kingdom that provides a wide range of postal and non-postal related products including po ...

now provides cash services to many banks on a commercial basis. In April 2013, the Post Office announced it would be launching a retail banking service accessible through Post Office branches under the

Post Office Money Post Office Money is a financial services brand operated by Post Office Limited which provides credit cards, current accounts, insurance products, mortgages and personal loans to customers in the United Kingdom through Post Office branches, th ...

brand, now run by the

Bank of Ireland Bank of Ireland Group plc () is a commercial bank operation in Ireland and one of the traditional Big Four Irish banks. Historically the premier banking organisation in Ireland, the bank occupies a unique position in Irish banking history. At ...

References

{{Authority control Defunct banks of the United Kingdom Economy of Merseyside Defunct companies based in Liverpool Banks established in 1968 Banks disestablished in 2003 1968 establishments in the United Kingdom Postal savings system