Flemings, one of last grand old City names, sold to US

More than a hundred years of banking history looked set to end yesterday as it became clear that one of Britain's last remaining independent banks was likely to be taken over by a US investment bank.

And, as the news that Flemings Bank was in takeover talks with Chase Manhattan spread through the City, there were concerns not just about its financial future, but about what would happen to the largest private collection of Scottish art.

Most visitors arriving at Flemings Bank, tucked away in a narrow street in London's financial district, are wholly unprepared what lies beyond the revolving doors. As they rise slowly through the building in the glass lift shaft beyond the marble entrance, visitors are treated to a magnificent view of the paintings hung in glass-walled atriums.

More than 950 oil paintings and watercolours adorn the walls of Flemings and works of art are hung in every office, now the subject of much speculation as to a possible dispersal or sale of the collection.

Helen Smailes, who curated an exhibition of works from the Fleming Collection at the National Gallery of Scotland in 1995, said: "It is the most remarkable corporate collection of Scottish painting in Britain in terms of both quality and quantity and we were delighted to be able to show a selection of it in our exhibition."

She refused to speculate on what might happen to the collection but said that a large number of the works were "of museum quality".

David Barrie, the director of the National Art Collections Fund, said: "There is no doubt that it is a very very fine collection and if it were to be dispersed we would be delighted to see any of these wonderful works finding their way into public collections. It would be disappointing if it were to be split up but if one or two of them could be kept together and go to the national museums that would do much to raise public awareness of Scottish art."

The collection was started in 1968 after David Donald, one of the directors, suggested the new offices could be brightened up with a few pictures.

He was given the task of buying one or two with the proviso that they should be by Scottish artists or depict a scene in Scotland, because the bank's founder, Robert Fleming, was from Dundee. For the next 18 years, until his death in 1985, Mr Donald bought up to 30 paintings a year, mainly modern art. After his death, responsibility for buying works of art fell to Robin Fleming, the grandson of the bank's founder and its former chairman.

None of the works are said to be very expensive although there is no doubt that the collection as a whole is extremely valuable. The paintings are sold on only in exceptional circumstances, but they are regularly moved around the offices either to ring the changes or for diplomatic reasons. In 1997, the bank acquired a nude by the Scottish artist David McClume but it had to be taken down twice in short succession, once for a group of visiting Arabs who might have been offended and the second time for a delegation from the Salvation Army.

Artists included in the collection are the colourist Samuel Peploe and Anne Redpath. Recent acquisitions have concentrated on work by young artists such as Keith McIntyre, Steven Campbell and Lucy Ross.

The Flemings are one of Britain's oldest banking families and the firm was, at least until yesterday, a rarity in that it was owned by a family trust whose views still carry weight.

It was founded in 1873 by Robert Fleming, the clerk of a Dundee jute maker who helped form the Scottish American Investment Trust. He invested mainly in railways and cattle ranches in the US before Robert Fleming and Co was officially formed in 1932.

The bank has hung onto many of the old City traditions such as piping staff into the office three times a week, although the old custom of serving only beer and not wine to guests has now disappeared.

By 1996 Flemings was Britain's second most profitable independent merchant bank and several large banks have tried to take it over. Four years ago Roddie Fleming, the then director, said: "We are very determined to remain independent and see no advantage in tying up with another party. We are not for sale. We want to remain where we are."

It now seems that Mr Fleming, who was expected to take over as new chairman next month, will set up on his own in an attempt to salvage some of the family pride - if he can persuade Chase Manhattan to let him keep the Fleming name.

The formal announcement has yet to be made but the future of the paintings may not be the only thing in doubt. On the third floor of the bank, in the trading floor, is a work by Jock McFadyen. It shows a dog scavenging in the rubbish on a derelict site in London's old docklands, a scene that may well be replicated if art dealers and galleries start scrabbling for the pick of this collection.