Nationwide Takes Over Dunfermline Building Society

The Nationwide has announced it is to buy part of the collapsed Dunfermline Building Society's branches after the Government failed to intervene.

The Bank of England confirmed the Nationwide Building Society has bought core parts of the institution, including its retail and wholesale deposits, branches, head office and most of its £1 billion residential mortgage book.

The building society, however, will not take ownership of a number of high-risk assets like self-certification mortgages.

Nationwide struck the agreement less than 48 hours after the UK Government put the building society on the market.

The Bank of England said: "It is business as usual for all customers. Dunfermline's deposit business will continue to operate normally.

"Savers can be assured that their money is safe.

"All of Dunfermline's staff have been transferred to Nationwide."

Dunfermline Chairman, Jim Faulds, said he "warmly welcomed" the news, but added he was "deeply disappointed" the Government did not step in to offer state aid.

"I am hearing encouraging noises - yet to be confirmed - that Nationwide will do all they can to keep as much employment as they can in Scotland," Mr Faulds told BBC Radio 4's Today programme.

"I and my board have worked tirelessly to protect the members and staff and we have no reason to feel bad about this.

"We are deeply disappointed with the Government’s decision. It was unnecessary. But nevertheless we need to move on and we need to work with the new owners."

The Dunfermline's commercial book was performing "reasonably well" and the building society could have been saved if it was given access to around £20-30 million from the Government's liquidity scheme, said Mr Faulds.

"This was an unnecessary move by the Treasury," he said. "They clearly didn't want to take the risk. We could have had an independent, sustainable future."

(JM/BMcC)