Dunfermline BS Stability

baby_boomer

Scotland on Sunday - Treasury poised to bail out Dunfermline as other rescue attempts fail

"The Treasury was moving towards a Bradford & Bingley-style bail-out of Dunfermline Building Society last night as other rescue options appeared to be unworkable.....

......Talk of a Monday or Tuesday deadline in order for Dunfermline to sign off its accounts has been played down. "There is no deadline," said a Treasury source.

[## - In fact there is a Monday/ Tuesday deadline. In order that members receive their AGM notices and summary financial statements 21 days before the AGM which can't be later than 30 April according to BS rules.]

However, he indicated that the crisis would be resolved and that there were "other options" not yet in the public domain.....

[## - Treasury double-speak? ]

He refuted suggestions that the Treasury was reluctant to support Dunfermline because it might prompt other loss-making societies to seek financial aid.

The source also cast doubt on claims that Gordon Brown had become personally involved....

Dunfermline is due to reveal an annual loss of £26m this week, but the £90m provision on assets that has been widely reported is inaccurate. The writedown on commercial property is likely to come in at £32m.

[## - Get with it Terry. No-one's said a £90m writedown. Just that the capital injection miught have to be more than the write-down because of ongoing uncertainty. ]

.......Dunfermline has tried to raise a bond from other societies as the FSA urged it to look for support from private sources.

It is understood that three building societies agreed to provide support [for a collective PIBS bond] and three would not

There were also approaches from some about a takeover."

## - They probably got a shock when they looked at the books! Or maybe they were just curious - like the chancers who come for a look when your house is up for sale, or the motorists who slow down to look at a serious car crash.

baby_boomer

And finally, while the Scottish papers enjoy the political circus - the real low-down, just like last week when he alone reported that the auditors had refused to sign off, comes from the excellent Prestridge at Financial Mail on Sunday .

This is Money

".....John Goodfellow, chairman of the Building Societies Association, tried to organise yesterday's rescue by calling together executives from the Britannia, Nationwide, Coventry, Leeds, Skipton, Yorkshire and Chelsea societies. Some of these societies had already been approached by the Financial Services Authority in recent weeks to take over the Dunfermline .

However Mr Goodfellow, a former boss of the Skipton, was unable to convince the societies at the meeting that the Dunfermline merited rescuing. This is what triggered the Treasury's move...."

"....The Government is extremely reluctant to take on more toxic debt at the taxpayers' expense, but the chances of a white knight rescue look slim."

baby_boomer

Jim Fauds is off his trolley IMHO. He needs to be sat in front of a Treasury Select Committee grilling to face up to what he has done. And after that, a nice holiday and/or some therapy. The man's in shock because, like me, he had naively assumed that the support of the Scottish Executive for Dunfermline would be enough of a defence.

BBC - Dunfermline Chairman attacks Treasury decision

"The chair of the collapsed Dunfermline Building Society has attacked the UK Government, accusing the Treasury of "sacrificing" the business.

Jim Faulds also hit out at "faceless mandarins" who he said had refused to talk to the Dunfermline to help secure its future............

............Speaking on BBC Scotland's Politics Show, Mr Faulds dismissed claims the Dunfermline had debt links to the US sub-prime mortgage market, and added that the building society had no bad debts in relation to the collapsed Icelandic banking system......

......Mr Faulds went on: "We have been working night and day, tirelessly for the last six months, to get some common sense into this decision and we have failed - not because we don't have common sense but because we cannot get the mandarins, the faceless mandarins in London who will not speak to us, to sit round the table and see we have a sustainable future."

The government hopes to be able to announce a buyer for the Dunfermline by Monday.

There are currently four potential bidders - two banks and two building societies.

Mr Faulds said that, if left alone, the Dunfermline would have been able to report a small operating profit for 2008, while putting some money aside to resolve issues with its troubled commercial loan book, in the coming years.

"It would be excellent news for the taxpayer, excellent news for the staff excellent news for the members and you can tell how angry and frustrated I am about this needless waste of a first-class Scottish institution," he said.........................."

## - With delusions like this, it's no surprise that they got into trouble in the first place. However, there are people in Scottish politics who will listen to him :rotfl:

## - And exactly when did Treasury mandarins start to enjoy throwing away public money like this? They are automatically programmed to do the exact opposite as the default option.

baby_boomer

BBC - Dunfermline BS - A history

Count_Dante

baby_boomer wrote: »

Jim Fauds is off his trolley IMHO. He needs to be sat in front of a Treasury Select Committee grilling to face up to what he has done. And after that, a nice holiday and/or some therapy. The man's in shock because, like me, he had naively assumed that the support of the Scottish Executive for Dunfermline would be enough of a defence.

BBC - Dunfermline Chairman attacks Treasury decision

"The chair of the collapsed Dunfermline Building Society has attacked the UK Government, accusing the Treasury of "sacrificing" the business.

Jim Faulds also hit out at "faceless mandarins" who he said had refused to talk to the Dunfermline to help secure its future............

............Speaking on BBC Scotland's Politics Show, Mr Faulds dismissed claims the Dunfermline had debt links to the US sub-prime mortgage market, and added that the building society had no bad debts in relation to the collapsed Icelandic banking system......

......Mr Faulds went on: "We have been working night and day, tirelessly for the last six months, to get some common sense into this decision and we have failed - not because we don't have common sense but because we cannot get the mandarins, the faceless mandarins in London who will not speak to us, to sit round the table and see we have a sustainable future."

The government hopes to be able to announce a buyer for the Dunfermline by Monday.

There are currently four potential bidders - two banks and two building societies.

Mr Faulds said that, if left alone, the Dunfermline would have been able to report a small operating profit for 2008, while putting some money aside to resolve issues with its troubled commercial loan book, in the coming years.

"It would be excellent news for the taxpayer, excellent news for the staff excellent news for the members and you can tell how angry and frustrated I am about this needless waste of a first-class Scottish institution," he said.........................."

## - With delusions like this, it's no surprise that they got into trouble in the first place. However, there are people in Scottish politics who will listen to him :rotfl:

## - And exactly when did Treasury mandarins start to enjoy throwing away public money like this? They are automatically programmed to do the exact opposite as the default option.

I don't think Jim Faulds was the man who involved the society in the dodgy loans. And his claim that the society has no sub-prime mortgages is a true or false proposition - someone is telling fibs. Perhaps the society bought the so called Alt-A stuff that is better than sub-prime but is still a bit dodgy?

baby_boomer

Count_Dante wrote: »

I don't think Jim Faulds was the man who involved the society in the dodgy loans.

Elsewhere he seemed to be spinning that it wasn't his fault. Don't believe it.

He has been a non-executive director of the Dunfermline for around a decade - so he IS legally responsible for its strategy over that period.

But did he know what he was doing? As he himself said in 2001.

Lucky Jim cashes in on his sale of Scotland's best know advertising & marketing group

"... "I think there are a lot of companies that need to have a non-exec with a marketing background rather than a pure financial brain....."

As building society savers, we'd have taken the financial brain rather than the salesman, any day, Jim .

It looks like he may have overstretched himself, with multiple non-executive directorships , into areas beyond his competence. But these many other non-executiveships will have brought him into close contact with the Scottish political establishment so he may well be working closely with allies in Holyrood in respect of these recent anti-Westminster outbursts.

baby_boomer

Telegraph - Dunfermline BS's demise puts Alex Salmond back in the game and gives him a stick to beat Whitehall and Gordon in his own back yard

The fun's just starting.

Times - Dunfermline to be broken up and sold while Alex Salmond fumes

This is going to be political Punch & Judy with no holds barred . The arguments will rage not just about outcomes but also the process - including spin.

Never mind that it's an irrelevant discussion over a fatally flawed society.

Channel 4 - Crazy Jim Faulds lays into Chancellor Darling (the Treasury have apparently briefed him badly).

"...We are being attacked for having losses that we haven't yet announced."

Yea, right, Jim . In Never Land, if you wish hard enough, they'll all disappear :rotfl:

sons_2

Looking forward to a great week and seeing what Robert Peston will write about it all.

baby_boomer

No-one's immune from this one.

Will Peston''s commentary put his Treasury sources and relationship with no.10 on the line in order to preserve the BBC's "neutral" relationship with Scotland? Or is he more likely to tell the Scots the truth that they are whistling into the wind and running out of breath?

The BBC's reporting of the issue could itself become an issue in the Scottish Parliament :rotfl:

bristolleedsfan

baby_boomer wrote: »

Times - Dunfermline to be broken up and sold while Alex Salmond fumes

Fair play to greg. :T


"What ? No mention of a windfall for the members, or has everybody decided to give up their rights to such bonuses in these troubled times ? "