A Tale of Two Jersey Banks in the 1960s

A Tale of Two Jersey Banks in the 1960s

From the pages of Jersey Life, 1966, a look at Arbuthnot Latham (Channel Islands) Limited and Walford merchant bank.

In the 1960s, along with the so-called 'rich English residents' came the merchant banks, English solicitors, and the rise of the 'financial advisor'; soon after, by the 1970s, the high street banks had set up offshore subsidiaries. At this time, the finance market was not particularly well-regulated, and as a result of various speculations, the Walford merchant bank went bankrupt.

In his book “The Offshore Interface”, Mark Hampton comments


"By 1967 the number of banks in Jersey had increased to 21 and the States of Jersey enacted the Depositors and Investors (Prevention of Fraud) (Jersey) Law. This required banks to submit annual returns to the States and generally there was a tightening of restrictions on banking activities. However, despite this basic regulation in 1970 there were two locally-owned bank failures, the Guarantee Trust of Jersey and the Walford Banking Company." 

"It has been argued that these two banks failed because of poor banking practices, especially lending on UK properties (interview respondent). Arguably, the local effect of these failures was to reinforce the Finance and Economic Committee View that only banks of reputable parentage should be admitted to the OFC."

Arbuthnot Latham (Channel Islands) Limited

While Arbuthnot Latham still has a presence in the Channel Island, this company, created in January 1966, ceased to exist and was dissolved on March 2010

Arbuthnot Latham (Channel Islands) Limited, Merchant Bankers, are a wholly owned subsidiary of Arbuthnot Lalham & Co Ltd. of Queen Street, London. E.C.4. They opened an office in La Colomberie Court, St. Helier, in January of this year [1966].

The Parent Company is one of the sixteen members of the Merchant Bankers Accepting Houses Committee and has carried on a successful business in the City of London since 1833. The present Chairman, Mr. J. F. Prideaux, 0.3.5., is also deputy Chairman of the Westminster Bank and recently attended the dinner given by Mr. Wilson at No. l0 Downing Street for eighteen prominent City Bankers.

Expansion has been rapid in the past few years and the company has recently acquired the capital of Dawson & Forbes, investment managers, and T. G. Harrison & Co. Ltd., also a firm of investment managers and the Channel Island Company has access to their combined statistical departments. In July, I965. the Philadelphia National Bank acquired a 12 ½% interest in the issued ordinary capital of Arbuthnot Latham & Co., forming a promising link with an American Bank of International repute, their President joining the board.

The Parent Company. whose assets are in excess of £15 million, was founded by John Arbuthnot and Alfred Latham in the early 19th century since which time members of both families have taken an active interest in the business. The original Mr. Latham left the Company to become a director and later the Governor of the Bank of England. Mr. Andrew Arbuthnot, a great-great nephew of the founder, is a managing director of the London Company and is Chairman of the Channel Island subsidiary. Mr. Arbuthnot's co-director in ‘Jersey is Mr. T. C. Walker, F.C.A.

The local Company aims to provide a personal and comprehensive investment service, including the handling of portfolios both for companies and for individuals. The Company also accepts money on deposit at call or for fixed periods at London rates of interest.

A gold peacock's head, the crest of the Arbuthnot family, has been adopted as the insignia of the Company which, like other Merchant Banks. started out as overseas merchants and, because of their standing, came to accept bills drawn on them by smaller houses; this grew into the accepting business in which all Merchant Banks are engaged.

The local Company is managed by Mr. I. A. Bristowe who was, for some years, a partner in a jabbing firm on the London Stock Exchange. He is assisted by Mr. S. J. Scrimgeour whose business includes merchant banking and stock-broking in the City of London.

Walford Merchant Banking Corporation

Incorporation Date 10 February 1962 (about 60 years ago) Dissolution Date 27 October 1972 Company Type RC - Registered Private Company.


THE private banking activities of Mr. H A. Walford, an Underwriting Member of Lloyds of London, began in Jersey in 1953, and due to the increasing number of enquirers seeking his advice on financial matters culminated in the formation of the Walford Merchant Banking Corporation Ltd. in 1961. The family 'crest has as its motto Confide Recle Agens (Trust in Fair Dealing). This applies to their clients at both ends —those for whom they act as well as those to whom they lend. 

All banking business is undertaken and the Bank operates deposit accounts at very favourable rates of interest on varying terms, and also cheque current accounts, with details on the statements being given in full; interest is paid on current accounts as well as on deposit accounts. The Bank specialises in Portfolio Management and due to their close personal links with the City they give customers the opportunity in participating in special situations both medium and long term.

Merchant Banking.

The Bank has a constant flow of enquiries for finance for all kinds of projects, apart from local ‘quality‘ H.P. business encouraged by their prompt payment bonus system (H.P. customers who make every payment on its due date are entitled to a discount of up to 15% on the HP. charges).

The Bank specialises in ‘leasing' of industrial equipment, machinery, etc.. and have a long list of customers in the British Isles—included in this list are many famous names of some of Britain‘s largest Public Companies—the Bank‘s endeavour is to encourage this gilt edged business, and prefers a smaller profit on dealing with one of the giants of industry to the larger profit obtainable on less good quality lending.

Import and Export Finance

Backed with the UK Government’s guarantee, (E.C.G.D.) Walford Banking undertakes the financing of foreign exports. Local Companies

The Bank is a shareholder and provides financial management, control and accountancy to several Jersey companies. Their earliest venture was the Jersey Tufting Co. Ltd. which they jointly own in conjunction with the £4 million Vantona Textile Group. They produce a specialised range of candlewick bed- spreads, designed entirely in Jersey and attract buyers from all parts of the British Isles who come to Jersey to discuss their long term contracts. The factory was recently extended with the installation of their own dyeing plant in a new factory at St. Aubin.

  

The Bank’s most recent joint venture has been the opening of the Golden Egg restaurant in Jersey in conjunction with the Golden Egg Holding Co. of London, which has Stock Exchange market value of £2 million, and was one of the out- standing success stories in 1964 when the Golden Egg went to thc public and offered their shilling shares at 9/9d., which was over-subscribed by 133 times.

Amongst other local Companies the Bank has an interest in are Vanity Fayre Ltd., Granosit (World Exporters) Ltd. to mention but two.

Factoring

The Bank undertakes factoring for wholesalers, whereby the entire sales ledger is purchased, thus providing immediate cash and liquidity for the wholesaler. The Bank continues to purchase credit sales on a weekly or monthly basis. Besides providing ready money, the service also relieves the wholesaler of maintaining a sales ledger department thus effecting additional economies.