Girobank

Girobank was a British banking institution created by the Post Office to introduce a giro-based payment system using post offices as customer access points. It opened for business in October 1968 under the name National Giro, later becoming National Girobank and finally Girobank plc. Its development followed recommendations made by the Radcliffe Committee, which examined the operation of the United Kingdom monetary system and proposed that a giro system should be introduced if the established banks did not provide one. A 1965 government white paper, A Post Office Giro, set out the operating model: customers would use post-office branches while transactions were processed centrally through an extensively automated facility. The principal operating centre was built at Bootle in Lancashire, on a site selected in 1965 and completed in March 1968. The institution was designed from the outset around computerised processing and became an important early user of automation in financial services. It was described as the first financial institution in Europe, and possibly the first in the world, to be established as a fully computerised operation. Girobank also became associated with several banking innovations, including early adoption of optical character recognition, interest-bearing current accounts and telephone banking. Its initial years were financially difficult. The bank relied heavily on transaction volumes and did not immediately achieve profitability. One of its largest users was the British government, which used giro cheques to distribute unemployment and social-security payments. Recipients could cash those cheques at post offices, and the word “giros” entered everyday British usage as a description of such benefit payments. In 1969, Girobank partnered with Mercantile Loan Company to offer loans to account holders, helping stimulate account growth. The institution faced a possible closure after a change of government in 1970, when its continuing losses attracted scrutiny. A continuation plan recommended by Cooper Brothers was approved, but it included higher charges for many customers, a move from same-day to next-day service for some transactions, and a reduction in staffing. Over time, the business became more commercially sustainable. By the late 1980s it had expanded sufficiently to rank among the six largest banks in Britain. Girobank was privatised during the Conservative government's programme of selling state-owned enterprises. Alliance & Leicester, then a building society, won the bidding process in 1989, and the transaction was completed in 1990. The bank continued to use post offices for cash transactions under an exclusive arrangement for a defined period, while also becoming increasingly similar to other commercial banks. After privatisation, Alliance & Leicester expanded the operation and opened a £9.5 million centre in Wigan. The personal banking business was integrated into Alliance & Leicester's building-society operations. The business banking division retained the Girobank name for a time and was repositioned as a cash-handling and credit-card-processing provider for retailers and other banks. In 2003, the Girobank name was formally discontinued and the remaining business was renamed under the Alliance & Leicester brand. Alliance & Leicester was subsequently acquired by Grupo Santander in 2010, and its branding was replaced by Santander UK. Some payment slips and local-authority materials continued to display Giro-related wording for several years, but the original institution no longer operated as an independent brand. A 2009 campaign sought to revive Girobank, with support reported from parliamentarians, trade unions and small businesses. The former Bootle facility was later vacated by Santander in 2021, sold for redevelopment and demolished from 2023.

Girobank originated in debates about how Britain could broaden access to payments and banking. In 1959, the Radcliffe Committee recommended the creation of a giro system and suggested that the Post Office should consider establishing one if the commercial banks failed to act. The concept differed from conventional branch banking by separating customer access from transaction processing: people could use post offices throughout the country while their instructions were handled centrally. The government published A Post Office Giro in 1965. The plan called for post-office outlets supported by automated central processing. A site at Bootle in Lancashire was selected by September that year, and the Post Office acquired land formerly associated with railway sidings on the North Mersey Branch. A purpose-built office and data-processing complex was completed in March 1968. The National Giro opened for business in October 1968. Automation was central to its identity. Girobank was established as a highly computerised financial institution and became an early European adopter of optical character recognition. It also developed services that were unusual for the period, including interest-bearing current accounts and telephone banking. The use of post offices gave it a broad physical presence, while its centralised systems allowed it to process large volumes of relatively standardised payments. The early business was not profitable. Government use became particularly important because Girobank handled unemployment and social-security payments through giro cheques. These cheques were mailed to beneficiaries and could be cashed at post offices, leading to the colloquial use of “giros” for benefit payments. In 1969, a partnership with Mercantile Loan Company introduced loans for account holders and supported the expansion of the customer base. Financial pressure increased after the change of government in 1970. Closure was considered, but a continuation plan prepared with advice from Cooper Brothers was accepted. The restructuring raised charges for many customers, changed some services from same-day to next-day processing and reduced staffing from approximately 3,500 to 3,000. The bank eventually moved beyond its unstable early period. By the late 1980s, it had grown into Britain's sixth-largest bank. The next major turning point was privatisation. Alliance & Leicester, then a building society, won the bidding process in 1989, and the transfer was completed in 1990. Girobank remained distinguishable from many competitors because of its continuing relationship with post offices and the use of those branches for cash business. Alliance & Leicester also invested in the operation, opening a £9.5 million centre in Wigan. After the sale, the consumer banking activities were absorbed into Alliance & Leicester's broader business. The business banking arm continued under the Girobank name for a period, but its role shifted toward cash handling and credit-card processing for retailers and other financial institutions. This represented a move away from Girobank as a public-facing universal banking brand and toward a specialised payments-services operation. The Girobank name was dropped in 2003, when the remaining operation was renamed Alliance & Leicester. Alliance & Leicester itself was acquired by Grupo Santander in 2010, after which Santander UK branding replaced the Alliance & Leicester identity. Giro-related wording nevertheless survived on some bill-payment slips and in the practices of some local authorities. Government benefit payments were also moved to electronic systems operated through commercial banks from 2003, reducing the importance of the traditional giro-cheque model. In 2009, a campaign involving MPs, trade unions and small businesses argued for bringing Girobank back. The campaign reflected continued interest in a publicly oriented banking institution with broad access and a social-purpose role, although it did not restore the original brand. Santander stopped using the former Bootle building in 2021; the site was sold and demolition began in 2023. Girobank is therefore defunct as an independent institution, but its legacy remains visible in Britain's payment history, post-office banking arrangements and early financial-services automation.

1. 2023Demolition of former Bootle site begins

   Demolition began at the former Girobank office and data-processing complex.

   Source
2. 2021Former Bootle facility ceases use by Santander

   Santander stopped using the former Girobank operations building, which was later sold for redevelopment.

   Source
3. 2010Alliance & Leicester acquired by Grupo Santander

   Grupo Santander acquired Alliance & Leicester, and Santander UK subsequently replaced its branding.

   Source
4. 2009Revival campaign launched

   A coalition including MPs, trade unions and small businesses campaigned for the return of Girobank.

   Source
5. 2003Girobank brand discontinued

   The business banking operation was renamed Alliance & Leicester and the independent Girobank identity was dropped.

   Source
6. 1990Privatisation completed

   The transfer to Alliance & Leicester was completed, placing Girobank in private ownership while preserving its post-office cash-service relationship for a period.

   Source
7. 1989Alliance & Leicester wins privatisation bid

   Alliance & Leicester won the process to acquire the state-owned Girobank operation.

   Source
8. 1970Continuation plan approved after financial pressure

   The government approved continuation rather than closure, alongside service, pricing and staffing changes intended to address losses.

   Source
9. 1969Loan partnership established

   National Giro partnered with Mercantile Loan Company to provide loans to account holders and encourage account growth.

   Source
10. 1968National Giro opens for business

    The Post Office's new giro institution began operations in October from its purpose-built computerised facility at Bootle.

    Source
11. 1965A Post Office Giro white paper published

    The government outlined a Post Office-operated payment network using post-office outlets and centralised automated processing.

    Source
12. 1959Radcliffe Committee recommends consideration of a giro system

    The committee examining Britain's monetary system proposed a giro system and suggested that the Post Office investigate providing one if the major banks did not.

    Source

A mass-market, branch-accessible banking service built around post offices, centralised processing and payment automation. In its later life, the Girobank name was used mainly for business banking infrastructure, cash handling and card processing rather than as a standalone consumer bank.

• Giro current accountsRetail banking1968

  The core consumer service allowed customers to make and receive payments through a centrally processed account while using post offices as local access points. Girobank was notable for offering interest-bearing current accounts at a time when this was unusual among British banks.

• Giro chequesPayments1968

  Giro cheques were used extensively by the British government to distribute unemployment and social-security benefits. They were mailed to recipients and could be cashed at post offices, making the service an important part of the institution's public-facing role before electronic benefit payments became standard.

• Personal loansConsumer credit1969

  Personal loans were offered to account holders through a 1969 partnership with Mercantile Loan Company, supporting account acquisition and usage.

• Business cash handling and card processingPayments services1990

  After privatisation, the business banking arm retained the Girobank name and focused on handling cash and processing credit-card transactions for retailers and other banks. This specialist infrastructure role continued after the consumer banking activities were absorbed into Alliance & Leicester.

• Telephone bankingDigital and remote banking

  Girobank was an early European provider of telephone banking, extending account access beyond physical post-office counters and reinforcing its reputation for applying technology to mass-market banking.

• 2009Bring Back Girobank campaign

  United Kingdom

  MPs, trade unions and small businesses supported a campaign calling for a return of Girobank or a comparable publicly oriented banking institution.

  Outcome. The campaign did not restore the Girobank brand as an independent bank.

  Source

• 2003Retire the Girobank brandStrategy

  Following integration into Alliance & Leicester, the consumer and business activities no longer operated as a fully independent bank.

  What changed. The remaining business banking operation was renamed Alliance & Leicester and the Girobank brand was dropped.

  Aftermath. Giro-related wording survived on some payment materials, but the institution ceased to operate under its original identity.

  Source
• 1989Privatisation sale to Alliance & LeicesterM&A

  The British government placed Girobank in a privatisation programme for state-owned businesses.

  What changed. Alliance & Leicester won the bidding process, with the transaction completed in 1990.

  Aftermath. Girobank became part of Alliance & Leicester, while its business activities were progressively integrated and repositioned.

  Source
• 1970Continue operating after early lossesStrategy

  National Giro remained loss-making in its early years and faced pressure to close after the change of government.

  What changed. The government accepted a continuation plan advised by Cooper Brothers, while charges were raised for many customers, some processing was slowed from same-day to next-day service and staffing was reduced.

  Aftermath. The institution survived, improved its performance and later became one of Britain's six largest banks.

  Source

• 2023Demolition began at the former Bootle operations site

  Demolition of the former Bootle office and data-processing site began after its sale for redevelopment.

  Other
  Source
• 2021Santander ceased using the former Bootle Girobank building

  Santander stopped using the former Girobank operations building in Bootle and the site was subsequently sold for redevelopment.

  Other
  Source
• 2009Campaign launched to revive Girobank

  A campaign backed by members of Parliament, trade unions and small businesses called for the return of a Girobank-style institution.

  CampaignOther
  Source

1. Girobank