P. E. I. once boasted its own bank, the Union Bank of Prince Edward Island, which was established in 1863. Its foundation reflected a era of prosperity on the Island, when shipbuilding was at its pinnacle and infused the local economy with ocean-going trade and new settlers. The end of the Union Bank was instigated by an immense change to the way in which trade was carried out: the arrival of the railway. Perhaps overconfident from ship-building successes, the government and the bank bungled the building of the P.E.I. Railway, bringing about the financial disaster which forced the Island to enter Confederation. Cash-strapped, the Union Bank was forced to amalgamate with the Bank of Nova Scotia in 1883.
Although the Union Bank was at one point the largest bank on the Island, it did not have a branch in Kensington. The first banking institution known to operate in town was the Summerside Bank, established in nearby Summerside in 1863. A branch appears on the 1880 town atlas, situated on Victoria Street. Like the Union Bank, it was unable to weather the financial crises of the late nineteenth century, and later joined with the Bank of New Brunswick, which was the first chartered bank in Canada.
The Bank of New Brunswick operated in Kensington from 1906 to 1913. Then, like the Union Bank, it amalgamated with the Bank of Nova Scotia, a larger and more stable banking institution. These shakeups, which normally might make local investors nervous, were made less disruptive by the fact that the branch manager remained the same throughout the changeover.
The Bank of Nova Scotia has appeared in quite a number of different spots in Kensington. Records from 1919 indicate that the bank was at that time renting space from an influential local merchant, Dr. Donald Darrach. This lease was ended prematurely when the building was burnt out in the disastrous fire of 1924. Eventually, in 1925, the bank purchased a lot on the east side of Broadway Street. A new one-storey brick building was raised, and in 1928, the bank also built a lovely two-storey wood house for its manager. The modest brick structure served as the bank until 1964, when its new and current location was completed on the west side of Broadway Street. Despite these changes in location, Scotiabank has continued to serve Kensington's banking needs without interruption since 1913, either on one side of Broadway Street or the other.