The suspect is believed to have attempted to start fires in Santander and Barclays by throwing 'petrol on the floor' before fleeing the scene chased by police officers.
-> Son killed own mother by repeatedly smashing her over head with claw hammerThe man, who has not yet been named, was arrested and remains in police custody.
The drama unfolded at around 1pm in Hull, East Yorkshire, after police were called to reports of a man carrying a meat cleaver and a container of liquid thought to be petrol.
Mandy Mighty, 51, from Hessle, works at Gosschalks Solicitors in Hull City Centre and saw the drama unfold.
She said: "I was in the Tesco next door and I crossed over to near to the Barclays which is opposite the Santander and then a lady came running towards me from the Santander screaming frantically. She was a small older lady and she was screaming 'he's gonna set the bank alight'"
"And I just thought this lady is a bit crazy... I didn't believe her"
"I said to her 'you'll be alright love' and I tried to comfort her"
"And then other people stopped and asked the lady what was wrong and she said there's a man in there threatening to set the bank alight and she said the shutters came down"
"I put my arm around her and tried to reassure her that everything was alright I couldn't see anything happening in the bank from where I was standing at the time"
"She kept repeating herself saying 'he's gonna set the bank alight'"
"Then the doors opened and I saw people running and scurrying out of the way and that's when I saw the man stood in the middle of the bank with a bag next to him and he pulled something out"
-> Police called to body found at Leeds Playhouse during excavation works"He eventually came out of the Santander and he ran towards us with what I thought was a machete but I think it was a meat cleaver"
"People were just stood there videoing and I told them 'you need to run, he's got a meat cleaver'"
"I hid in the nail salon and told them to let me in and lock the door"
"The PCSOs got there almost straight away. The PCSOs were amazing they didn't have any weapons or anything to defend themselves and they were trying to deal with the situation
"A few police vans started to turn up and then a black SUV turned up with armed police in it"
"I was just a bit shocked because you don't expect that"
"I was worried because my son goes to college in the town centre and I didn't know where he was so I rang him and luckily he was still in a lesson"
-> Man armed with meat cleaver tried to set fire to two banks in Hull city centreHumberside Police has said the incident is not being treated as terrorism and the "situation was contained very quickly by police and emergency crews".
Chief Superintendent Phill Ward, North Bank Commander, said: “We are mindful of the public's concern that these types of incidents may be related to terrorism, however there is nothing to suggest that this is anything other than an isolated incident which has been dealt with promptly by the responding police and emergency services.
“I want to offer reassurance that our priority at all times is the safety of the public.”
Bank staff say they are co-operating with the police to work out the motivation behind the attack.
A Santander spokesman said: “Santander is shocked by the attack on its branch in Hull and we are cooperating with the authorities to understand what happened and why.
“None of our colleagues or customers were physically injured in the incident, and our immediate priority is to provide support and counselling to those who are understandably upset.”
A Barclays spokesman said: "We can confirm an incident took place this afternoon in the Barclays Hull city centre branch. "There are no physical injuries to staff, however, we are cooperating fully with the police and the branch will be closed until further notice."
Additional reporting by Shannon Mighty