Ionian Bank
Encyclopedia
The Ionian Bank was a British overseas bank that investors established in 1839 to operate in the Ionian Isles
, which was then a British Protectorate
. The bank later expanded in Greece
and the Eastern Mediterranean. After losing its branches in Egypt
to nationalization, IB retreated from the Mediterranean, selling all its operations there. Michael Behrens and John Trusted then acquired Ionian Bank, converting it into a merchant bank
in London. It was never very successful and in 1977 it voluntarily gave up its banking licence.
(a British protectorate
), and Great Britain. This made the bank the oldest in Greece. The bank received a 20-year grant of the exclusive privilege of issuing and circulating banknote
s for the Ionian Islands. The bank soon changed its name to Ionian Bank (IB), and initially only operated in the Ionian Islands, opening branches in Corfu
, Zakynthos
and Kefalonia
the following year. In 1845, a year after the bank received a UK Royal Charter
, it established agencies in Athens
and Patras
, and appointed special agents in Venice
and Trieste
.
In 1864, the Ionian Islands united with Greece and IB converted its agencies in Athens and Patras to full branches (possibly before 1864.) IB then extended its operations to the rest of Greece. The Athens office took over as Head Office from the Corfu office in 1873. By 1880, the bank lost its legal monopoly
position in the Islands, but gained an extension to its (no longer exclusive) right of note issue. In 1883, IB gave up its Royal Charter and registered as a limited liability company
. Ionian Bank expanded into Egypt by opening branches in Alexandria
in 1907.
During World War I, Ionian Bank served Allied military interests in the Balkans
, opening branches at Salonika, Syra, Chios
and Mitylene.
In 1920, Ionian Bank lost its privilege of note issue. Two years later, IB acquired the Constantinople
branch of Guaranty Trust Co. of New York, and possibly a sub-branch or agency in Smyrna. In 1924, IB continued its international expansion by opening a representative office in New York. Then in 1926, IB established a branch in Nicosia
, Cyprus and next year agencies in Famagusta
, Limassol
and Larnaca
. IB retreated from New York in 1928, closing its branch office there, and from Constantinople the next year by selling its branch there to Deutsche Bank
. Lastly, in 1938, acquired more than two-thirds of the share capital of Popular Bank, (est. 1905).
forcibly acquired IB's holdings in Popular Bank and ran it as an Italian bank for the duration. At the end of the War, IB regained its holdings. In 1949, IB further increased its holdings in Popular Bank to four-fifths of the capital. Two years later it returned to Egypt
by establishing a branch in Cairo
.
In 1956, the Egyptian government established Bank Al-Goumhourieh to take over the Egyptian operations of Ionian Bank and the Ottoman Bank
in the wake of the Suez Canal War. IB had provided cover for British Intelligence (two directors of the bank, Sir Bickham Sweet-Escott and Robin Brooke, belonged to MI6), but all British and French banks were Egyptianized at the same time.
The next year IB sold its Greek assets to the Commercial Bank of Greece
, which maintained IB as a separate entity, and its assets in Cyprus to the Chartered Bank
. The Greek IB became the Ionian and Popular Bank of Greece by merging with its subsidiary, Popular Bank. Eventually, Alpha Bank
purchased the Ionian and Popular Bank of Greece.
Ionian Islands
The Ionian Islands are a group of islands in Greece. They are traditionally called the Heptanese, i.e...
, which was then a British Protectorate
Protectorate
In history, the term protectorate has two different meanings. In its earliest inception, which has been adopted by modern international law, it is an autonomous territory that is protected diplomatically or militarily against third parties by a stronger state or entity...
. The bank later expanded in Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
and the Eastern Mediterranean. After losing its branches in Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
to nationalization, IB retreated from the Mediterranean, selling all its operations there. Michael Behrens and John Trusted then acquired Ionian Bank, converting it into a merchant bank
Merchant bank
A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to....
in London. It was never very successful and in 1977 it voluntarily gave up its banking licence.
History
A "decree of the Eminent Senate of the Commonwealth of Ionian Islands" established the Ionian State Bank in 1839, to finance trade between the Ionian IslandsIonian Islands
The Ionian Islands are a group of islands in Greece. They are traditionally called the Heptanese, i.e...
(a British protectorate
Protectorate
In history, the term protectorate has two different meanings. In its earliest inception, which has been adopted by modern international law, it is an autonomous territory that is protected diplomatically or militarily against third parties by a stronger state or entity...
), and Great Britain. This made the bank the oldest in Greece. The bank received a 20-year grant of the exclusive privilege of issuing and circulating banknote
Banknote
A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...
s for the Ionian Islands. The bank soon changed its name to Ionian Bank (IB), and initially only operated in the Ionian Islands, opening branches in Corfu
Corfu
Corfu is a Greek island in the Ionian Sea. It is the second largest of the Ionian Islands, and, including its small satellite islands, forms the edge of the northwestern frontier of Greece. The island is part of the Corfu regional unit, and is administered as a single municipality. The...
, Zakynthos
Zakynthos
Zakynthos , also Zante, the other form often used in English and in Italian , is a Greek island in the Ionian Sea. It is the third largest of the Ionian Islands. It is also a separate regional unit of the Ionian Islands region, and the only municipality of the regional unit. It covers an area of ...
and Kefalonia
Kefalonia
The island of Cephalonia, also known as Kefalonia, Cephallenia, Cephallonia, Kefallinia, or Kefallonia , is the largest of the Ionian Islands in western Greece, with an area of . It is also a separate regional unit of the Ionian Islands region, and the only municipality of the regional unit...
the following year. In 1845, a year after the bank received a UK Royal Charter
Royal Charter
A royal charter is a formal document issued by a monarch as letters patent, granting a right or power to an individual or a body corporate. They were, and are still, used to establish significant organizations such as cities or universities. Charters should be distinguished from warrants and...
, it established agencies in Athens
Athens
Athens , is the capital and largest city of Greece. Athens dominates the Attica region and is one of the world's oldest cities, as its recorded history spans around 3,400 years. Classical Athens was a powerful city-state...
and Patras
Patras
Patras , ) is Greece's third largest urban area and the regional capital of West Greece, located in northern Peloponnese, 215 kilometers west of Athens...
, and appointed special agents in Venice
Venice
Venice is a city in northern Italy which is renowned for the beauty of its setting, its architecture and its artworks. It is the capital of the Veneto region...
and Trieste
Trieste
Trieste is a city and seaport in northeastern Italy. It is situated towards the end of a narrow strip of land lying between the Adriatic Sea and Italy's border with Slovenia, which lies almost immediately south and east of the city...
.
In 1864, the Ionian Islands united with Greece and IB converted its agencies in Athens and Patras to full branches (possibly before 1864.) IB then extended its operations to the rest of Greece. The Athens office took over as Head Office from the Corfu office in 1873. By 1880, the bank lost its legal monopoly
Legal monopoly
A legal monopoly, statutory monopoly, or de jure monopoly is a monopoly that is protected by law from competition. A statutory monopoly may take the form of a government monopoly where the state owns the particular means of production or government-granted monopoly where a private interest is...
position in the Islands, but gained an extension to its (no longer exclusive) right of note issue. In 1883, IB gave up its Royal Charter and registered as a limited liability company
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
. Ionian Bank expanded into Egypt by opening branches in Alexandria
Alexandria
Alexandria is the second-largest city of Egypt, with a population of 4.1 million, extending about along the coast of the Mediterranean Sea in the north central part of the country; it is also the largest city lying directly on the Mediterranean coast. It is Egypt's largest seaport, serving...
in 1907.
During World War I, Ionian Bank served Allied military interests in the Balkans
Balkans
The Balkans is a geopolitical and cultural region of southeastern Europe...
, opening branches at Salonika, Syra, Chios
Chios
Chios is the fifth largest of the Greek islands, situated in the Aegean Sea, seven kilometres off the Asia Minor coast. The island is separated from Turkey by the Chios Strait. The island is noted for its strong merchant shipping community, its unique mastic gum and its medieval villages...
and Mitylene.
Between the Wars
Constantinople
Constantinople was the capital of the Roman, Eastern Roman, Byzantine, Latin, and Ottoman Empires. Throughout most of the Middle Ages, Constantinople was Europe's largest and wealthiest city.-Names:...
branch of Guaranty Trust Co. of New York, and possibly a sub-branch or agency in Smyrna. In 1924, IB continued its international expansion by opening a representative office in New York. Then in 1926, IB established a branch in Nicosia
Nicosia
Nicosia from , known locally as Lefkosia , is the capital and largest city in Cyprus, as well as its main business center. Nicosia is the only divided capital in the world, with the southern and the northern portions divided by a Green Line...
, Cyprus and next year agencies in Famagusta
Famagusta
Famagusta is a city on the east coast of Cyprus and is capital of the Famagusta District. It is located east of Nicosia, and possesses the deepest harbour of the island.-Name:...
, Limassol
Limassol
Limassol is the second-largest city in Cyprus, with a population of 228,000 . It is the largest city in geographical size, and the biggest municipality on the island. The city is located on Akrotiri Bay, on the island's southern coast and it is the capital of Limassol District.Limassol is the...
and Larnaca
Larnaca
Larnaca, is the third largest city on the southern coast of Cyprus after Nicosia and Limassol. It has a population of 72,000 and is the island's second largest commercial port and an important tourist resort...
. IB retreated from New York in 1928, closing its branch office there, and from Constantinople the next year by selling its branch there to Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
. Lastly, in 1938, acquired more than two-thirds of the share capital of Popular Bank, (est. 1905).
World War II and after
During World War II, the ItaliansItaly
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
forcibly acquired IB's holdings in Popular Bank and ran it as an Italian bank for the duration. At the end of the War, IB regained its holdings. In 1949, IB further increased its holdings in Popular Bank to four-fifths of the capital. Two years later it returned to Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
by establishing a branch in Cairo
Cairo
Cairo , is the capital of Egypt and the largest city in the Arab world and Africa, and the 16th largest metropolitan area in the world. Nicknamed "The City of a Thousand Minarets" for its preponderance of Islamic architecture, Cairo has long been a centre of the region's political and cultural life...
.
In 1956, the Egyptian government established Bank Al-Goumhourieh to take over the Egyptian operations of Ionian Bank and the Ottoman Bank
Ottoman Bank
The Ottoman Bank was founded in 1856 in the Galata business section of İstanbul, the capital of the Ottoman Empire, as a joint venture between British interests, the Banque de Paris et des Pays-Bas of France, and the Ottoman government.The opening capital of the Bank consisted of 135,000 shares,...
in the wake of the Suez Canal War. IB had provided cover for British Intelligence (two directors of the bank, Sir Bickham Sweet-Escott and Robin Brooke, belonged to MI6), but all British and French banks were Egyptianized at the same time.
The next year IB sold its Greek assets to the Commercial Bank of Greece
Emporiki Bank
The Emporiki Bank is a Greek bank. Its headquarters is in Athens, and the bank has 370 branches across Greece. The bank has most of its subsidiaries in Cyprus.It also has subsidiaries in Albania, Romania and Bulgaria, and a branch in London that also manages a financing subsidiary...
, which maintained IB as a separate entity, and its assets in Cyprus to the Chartered Bank
Chartered Bank of India, Australia and China
The Chartered Bank of India, Australia and China was a bank founded in London in 1851/1853 by Scotsman James Wilson following the grant of a Royal Charter from Queen Victoria. It opened its first branches in 1858 in Calcutta and Bombay and then in 1863 in Karachi and Shanghai...
. The Greek IB became the Ionian and Popular Bank of Greece by merging with its subsidiary, Popular Bank. Eventually, Alpha Bank
Alpha Bank
Alpha Bank is the second largest bank in Greece with 450 branches throughout the country. It also has a subsidiary and branch in London, and branches and subsidiaries throughout the Balkans . Founded in 1879, it has been controlled by the Costopoulos family since the very beginning...
purchased the Ionian and Popular Bank of Greece.
Sources
- Ionian Bank (1953) Ionian Bank Limited: A History. (London).
- Cottrell, P.L. (2002) Founding a multinational enterprise: Ionian Bank, 1833-1849, in P. Kostis, (ed.) The creators and creation of banking enterprises in Europe from the 18th to the 20th centuries. (Athens: Historical Archives, Alpha Bank).
- Cottrell, P.L. (2007) The Ionian Bank: An Imperial Institution, 1938-1864. (Athens: Historical Archives, Alpha Bank).
- Moncrief-Scott, Ian. 2001. International Trade on the Ionian Isles. Financial History (Winter), 28-31.
- Orbell, J. and A. Turton. 2001. British Banking: a guide to the historical records. (Aldershot: Ashgate).
Archives
- Catalogue of the Ionian Bank papers at the Archives Division of the London School of EconomicsLondon School of EconomicsThe London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
. - Archives regarding the establishment of the bank
- Court of Directors minute books, 1839 to 1917.
- Ionian Bank leaflet (pdf).