Scots tycoons invest £10m in the Airdrie Savings Bank

Published on Friday 27 August 2010 15:13

SOME of Scotland's best-known business leaders have invested £10 million into a tiny Lanarkshire savings bank, which they see as a model of how banking ought to be.

Transport tycoon Brian Souter and a group of other high achievers, including merchant banker Sir Angus Grossart and metals-to-Rangers Football Club owner Sir David Murray have each invested 1m in Airdrie Savings Bank.

They say the seven-branch bank is an example of how a traditional bank can survive and flourish and are looking to invest more to help it grow. It confirmed plans announced in March to open at least two more branches and hopes to have them operational by the end of the year.

Mr Souter, chief executive of bus and trains firm Stagecoach, said the public had become tired of the big-salary, big-profits culture of the larger banks and were seeing no benefits.

As news of the group's involvement in the Airdrie emerged yesterday morning, the bank was inundated with calls from well-wishers across Scotland wanting to follow their example and open accounts.

Tyre fitting pioneer Sir Tom Farmer, the financier Ewan Brown, food firm boss Alastair Salvesen and Mr Souter's sister, Ann Gloag, are among those investing, and other unnamed business people are pouring cash into deposit accounts or taking out loans.

Bob Boyle, the 20-hours-a-month unpaid president of the bank said: "The trustees are delighted that so many prominent Scottish business figures have come forward to back our ambitions to expand.

"I have lost count of the number of functions I have attended on behalf of the bank. But I don't even get my petrol expenses."

The initiative came from the business leaders, and their discussions led to the decision to invest.

Mr Boyle said: "The rationale is that they feel the bank's model is something they want to assist as it expands."

The bank, which is celebrating its 175th anniversary, is expected to open two branches outside Lanarkshire for the first time, with Perth, Stirling and Dundee in its sights, though it may remain closer to home.

Its expansion plans also include further development of its internet banking operations.

It has 60,000 account holders with deposits of more than 120m. It has no shareholders and so pays no dividends. Surpluses are reinvested in the bank's reserves.

Speaking for the new investors, Ewan Brown said: "We want to see banking values re-established. We will feel these values are important."

He said the group wanted to see the bank grow, but none was seeking influence. "The speed at which the bank grows will be determined by the trustees."

Mr Souter said: "I think people are very tired and angry of what happened with our banks in Scotland and I think this creates an opportunity in the future to build a new bank which is based on mutual principles.

"It's not going to be speculating in all kinds of strange derivatives and it's not going to be a bank that's going to be focused overseas, it will be a bank that's focused in Scotland - and really it's a peoples' bank."

How to sign up

IF YOU want to sign up with the Airdrie Savings Bank, there are a few simple steps to follow:

You will have to travel to one of its seven branches in Lanarkshire to open an account, where the standard bank identity checks apply - photo ID, such as driving licence of passport, will have to be shown.

However, the bank offers 24-hours-a-day internet banking, meaning it would be a viable option for customers across the country.