In 1920 James Mackay, later the Earl of Inchcape, of the Peninsular and Oriental Steam Navigation Company, established the P&O Banking Corporation to develop the shipping company's private banking business.[1] In the same year, Lloyds Bank and National Provincial Bank took shares in P&O Bank, which in turn acquired Allahabad Bank (est. 1865) in India. However, P&O Bank ran Allahabad Bank separately.
In 1920 P&O Bank established a branch in Colombo, Ceylon, which it followed by establishing branches in Shanghai, Hong Kong, Singapore, and Canton. The bank was unable to wean the customers of the shipping business away from their existing banking relationships and so ended up booking riskier business, with the result that it was plagued with bad debts.[2]
In 1927 Chartered Bank of India, Australia and China (now Standard Chartered Bank) acquired 75% of P&O Bank and later acquired the remaining shares, P&O Bank never having established a viable banking business. For a while, Chartered continued to run the two banks, P&O and Allahabad, separately. In 1937 Chartered merged in P&O Bank, but not Allahabad; the government of India nationalized Allahabad on July 19, 1969.
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