Mercantile Bank of India, London and China

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This article is about the historic British bank, Mercantile Bank, Ltd which was acquired by HSBC in 1959. For the other banks with similar names, see Mercantile Bank (disambiguation).
Mercantile Bank, Ltd
Industry Financial Services
Fate Acquired by HSBC
1959
Acquired by Citibank
1984
Acquired by the Bank of Tokyo-Mitsubishi, Ltd.
1987
Predecessor Mercantile Bank of Bombay (1853)
Mercantile Bank of India, London, and China
(1857)
Mercantile Bank of India, Ltd
(1893)
Founded 1853
Headquarters Bombay
(1853)
London
(1858)

The Mercantile Bank of India, London and China (later, Mercantile Bank, Ltd) was an Anglo-Indian bank with business focus in the Far East. It was founded in Bombay in 1853 as the 'Mercantile Bank of Bombay'; and later in 1857 was renamed to 'Mercantile Bank of India, London, and China' with London as its headquarters.

By 1959, through a series of mergers and divisions, its name had been shortened to 'Mercantile Bank, Ltd', and was acquired by HSBC the same year. The bank was an issuer of Hong Kong bank notes till 1974.

History

Early years : 1853 to 1900

The historic bank started life in October 1853 as the 'Mercantile Bank of Bombay', taking the name of the city, Bombay (now Mumbai), where it was founded. It expanded its operations to the Far East in November 1854 with the opening of an office in Shanghai. In 1857, the bank was granted a royal charter, and it established a presence in Hong Kong. The name was late changed to the 'Mercantile Bank of India, London, and China', and it moved its headquarters to London in 1858.[1][2][3]

It competed with the other great British banks of those times, namely - Oriental Bank Corporation, the Hongkong & Shanghai Bank and Chartered Bank of India, Australia and China; involved in trade between India and China and other British possessions, East of suez. By 1860, its total assets reached the amount of 21.7 million USD, a medium-sized bank by the standards of that time - a comparison shows that one of the leading Anglo-Indian banks, the Oriental Bank Corporation was about three times larger in terms of total assets. With the opening of the Suez Canal in 1869; and completion of Indo-European telegraph line[4][5] [6] from London to Calcutta, and its extension to China in 1871;[7] most British banks (including Mercantile bank) were well placed to expand and develop its business.

The bank expanded its presence with branches across India, the Straits Settlements and Federated Malay States, in Hong Kong and in Shanghai. It issued banknotes in Penang, Singapore and Hong Kong. It became the issuer of Hong Kong banknotes for the first time from 1859 to 1892.[8][9]

Trouble in 1893 meant it lost its charter, and was reconstituted as the 'Mercantile Bank of India, Ltd'.

Transition years : 1900 to 1959

There was a re-consolidation of its operations at the beginning of 20th century; and in 1912 it again became issuer of Hong Kong banknotes, a privilege it continued till 1974.[8][9]

During the Second World War, the Mercantile Bank had to close down several offices in the Far East, but it managed to re-open its offices after the war. The Hong Kong office re-opened in February 1946 and the Shanghai office in 1945, but was closed down its Shanghai operations in 1952 due to the Communist party rule.[10] In 1952, total assets of the bank totaled 205.5 million USD.

Amalgamation into HSBC and divestment : 1959 - 1987

The bank was acquired in 1959 by The Hongkong and Shanghai Banking Corporation. By then its name had been shortened again, to 'Mercantile Bank, Ltd'.[11][12] The acquired office in Bombay now houses the HSBC Group's Head Office in India.

The Mercantile Bank continued to issue Hong Kong banknotes till the early 1970s.[13] The signing of historic Sino-British Joint Declaration in 1984, provided HSBC added impetus to expand overseas and sold the entity - Mercantile Bank, Ltd to Citibank the same year as part of its consolidation strategy.[14][15] It was eventually sold to the Bank of Tokyo-Mitsubishi, Ltd. in 1987.[citation needed]

Not to be confused with Bombay Mercantile Bank which a is Co-operative bank.

Operations

See also

References

  1. ↑ The Business History Review, Vol. 72, No. 1
  2. ↑ Mercantile Bank of India, 1857-
  3. ↑ CEYLON Banknotes, Chartered Mercantile Bank of India, London & China 1867-80
  4. ↑ Page 32 | The Rise of India: Its Transformation from Poverty to Prosperity by Niranjan Rajadhyaksha
  5. ↑ Indo-European Telegraph line and impact of rapid industrialization
  6. ↑ The Indo-European Telegraph Company by Steven Roberts
  7. ↑ The foreign banks in China, Part I - (1850-1900) The Opening of China to the Outside World by John E. Sandrock
  8. ↑ 8.0 8.1 World Paper Money Catalog and History - Hongkong Dollar
  9. ↑ 9.0 9.1 Collection of Historicla banknotes - Hong Kong , Shanghai, China
  10. ↑ 255, Chapter | A History of Modern Shanghai Banking. The Rise and Decline of China Finance Capitalism Armonk, New York, London, M. E. Sharpe, 2003, 325 p
  11. ↑ HSBC - 150 years in India
  12. ↑ Flickr -Mercantile Bank of India - Bombay - 1942
  13. ↑ http://www.info.gov.hk/gia/general/201203/13/P201203130262.htm
  14. ↑ Citibank completes acquisition of Mercantile Bank Ltd. from Hongkong & Shanghai Banking Corp.
  15. ↑ http://www.referenceforbusiness.com/history2/35/HSBC-Holdings-plc.html
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