In the years before the war, bank branch networks expanded rapidly, increasing the national total by 200 or more each year. The location of a branch was the single biggest factor in securing new customers, so banks were always looking for new towns, suburbs or centres of employment where potential customers would find a bank convenient.
The outbreak of war in 1914 transformed the business landscape. While some industries collapsed, others scaled up their production, building new factories and employing thousands more people, and thereby creating demand for more banks.
At Gretna Green on the English-Scottish border, the government started building a munitions factory in November 1915. It went into operation the following April, and at its peak was responsible for producing more than half of Britain’s cordite.
Commercial Bank of Scotland regarded Gretna as part of its home turf – it had a long-standing branch at nearby Annan – but as soon as the munitions factory plans became public an English bank, London City & Midland, opened a branch there. Commercial Bank was outraged, and immediately opened a branch of its own, without even pausing to obtain the usual board approval; the bank’s board was only informed of the opening (and approved it) in retrospect.
Exceptional activity prevails at Aldershot at the present time and our branch there should be a great convenience to customers of the bank throughout the country
National Provincial Bank of England circular announcing the opening of a branch in Aldershot, 1915
Troop movements around the country also caused local peaks in demand for banking services. Between 1914 and 1916 National Provincial Bank of England opened and closed a succession of temporary branches serving army camps. It also established a more lasting presence in the army town of Aldershot.
In fact, banks could not hope to open branches in all the places where demand was growing. So many staff had joined the armed forces that keeping existing networks running was difficult enough, without trying to stretch limited resources even further. Some new branches – such as the one in Aldershot – were necessary, but many others closed, and 1916 was the first year in decades in which Britain’s number of bank branches fell.
The banks knew, however, that competition would be fierce after the war, and by 1918 many were planning for that day. Anxious to make up for lost time, several banks bought premises in towns where they wanted branches, so they could get started as soon as the war ended. As early as 13 November 1918, just two days after the Armistice was signed, National Provincial Bank published a list of nearly 150 towns where it intended to open branches ‘as soon as circumstances permit’. The stage was set for a major boom in branch openings.