Mercantile Bank of India, London and China

History

Early years: 1853–1900

The historic bank started life in October 1853 as the Mercantile Bank of Bombay, taking the name of the city, Bombay, 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.

It competed with the other great British banks of those times, such as the Oriental Bank Corporation, Hongkong and 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 US$21.7 million, 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 from London to Calcutta, and its extension to China in 1871; 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, and in Hong Kong and 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.

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

Transition years: 1900–1959

There was a re-consolidation of its operations at the beginning of the 20th century; and in 1912 it again became an issuer of Hong Kong banknotes, a privilege it retained until 1974.

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. In 1952, total assets of the bank totalled US$205.5 million.

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 the Mercantile Bank Ltd. The former office in Bombay now houses the HSBC Group's Head Office in India.

The Mercantile Bank continued to issue Hong Kong banknotes until the early 1970s. The signing of the 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. It was eventually sold to the Bank of Tokyo-Mitsubishi, Ltd. in 1987.

References

References

1. [https://www.jstor.org/stable/3116615 The Business History Review, Vol. 72, No. 1 ]
2. [http://gwulo.com/node/7107 Mercantile Bank of India, 1857–]
3. [http://numismondo.net/pm/cey/indexS117.htm CEYLON Banknotes, Chartered Mercantile Bank of India, London & China 1867–80]
4. The Rise of India: ] Its Transformation from Poverty to Prosperity by Niranjan Rajadhyaksha
5. [http://www.siemens.com/history/en/news/1069_indo-european_telegraph-line.htm Indo-European Telegraph line and impact of rapid industrialization]
6. [http://atlantic-cable.com/CableCos/Indo-Eur/index.htm The Indo-European Telegraph Company] by Steven Roberts
7. [http://www.thecurrencycollector.com/pdfs/Foreign_Banks_in_China_Part-I.pdf The foreign banks in China, Part I — (1850–1900)] ''The Opening of China to the Outside World'' by John E. Sandrock
8. (1994). "The economic growth of Singapore: trade and development in the twentieth century". Cambridge University Press.
9. [http://www.atsnotes.com/catalog/banknotes/hong-kong.html World Paper Money Catalog and History - Hongkong Dollar]
10. [http://www.spink.com/auctions/pdf/11003.pdf Collection of Historical banknotes - Hong Kong, Shanghai, China] {{webarchive. link. (18 June 2013)
11. A History of Modern Shanghai Banking. The Rise and Decline of China Finance Capitalism Armonk, New York, London, M. E. Sharpe, 2003, 325 p]
12. "HSBC - 150 years in India".
13. [https://www.flickr.com/photos/23268776@N03/5273141381/ Flickr -Mercantile Bank of India - Bombay - 1942]
14. "Hong Kong currency exhibition reveals story of city's evolution (with photos)".
15. [http://www.highbeam.com/doc/1G1-3362141.html Citibank completes acquisition of Mercantile Bank Ltd. from Hongkong & Shanghai Banking Corp.] {{dead link. (February 2019)
16. "HSBC Holdings PLC - Company Profile, Information, Business Description, History, Background Information on HSBC Holdings PLC".
17. "Hong Kong Monetary Authority, Money Past And Present, page 19".