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Nationwide takes over Dunfermline Building Society

Published:: 30 March 2009
Topic:: News,Money,Savings

Dunfermline, Scotland's largest building society, has been rescued in a state backed sale to Nationwide.

Nationwide has stepped in to buy up part of the collapsed building society after a government bail-out was deemed unviable.

The takeover comes as the beleaguered building society, which has 34 branches throughout Scotland, is expected to announce debts this week of £26million.

Under the deal Nationwide will take over Dunfermline's £2.3 billion retail arm, all 34 branches and £1bn book of healthy mortgages.

However, the tax payer will take on its bad loans after the Nationwide refused to buy up the Society's high risk assets, such as self-certification mortgages.

These less attractive assets will be transferred to the public sector - creating yet another banking burden on taxpayers.

But the good news for Dunfermline's worried 300,000 account holders is that it's "business as usual" according to the new owners.

(See our article: "How safe is my bank" and "Are my savings safe?" for more information on ensuring confidence when saving).

In addition, the Nationwide, the world's largest building society and with a strong record for absorbing weaker societies, will also take on Dunfermline's 530 staff and maintain its 140-year-old branding.

The state-backed rescue brings to six the number of UK deposit takers saved with direct taxpayer cash. The others are the Northern Rock, Bradford & Bingley, Royal Bank of Scotland and HBOS and Lloyds TSB, now merged into Lloyds Banking Group.

For more on the changes in ownership of your bank or building society, see our article "Who owns who?".