Dunfermline BS Stability

Milarky

bristolleedsfan wrote: »

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 ? "

Well what is the legal position exactly? If it goes into another building society (or the Co-op!) there's technically no loss of membership and no argument for compensation. But if it goes into Abbey (say) there is loss of membership and the former members of Dunfermline are surely in the position B&B or NR shareholders were. Either the society had some value (per member) upon transfer (NR?) or it had none (B&B?). I can't believe (or find it difficult to understand) this question would not come up as a statutory issue - regardless of the powers taken by the Treasury BOE FSA etc.

(Any thoughts?)

bristolleedsfan

Milarky wrote: »

Well what is the legal position exactly? If it goes into another building society (or the Co-op!) there's technically no loss of membership and no argument for compensation. But if it goes into Abbey (say) there is loss of membership and the former members of Dunfermline are surely in the position B&B or NR shareholders were. Either the society had some value (per member) upon transfer (NR?) or it had none (B&B?). I can't believe (or find it difficult to understand) this question would not come up as a statutory issue - regardless of the powers taken by the Treasury BOE FSA etc.

(Any thoughts?)

Unless someone decides to be :xmassmile to the Scottish savers and give them a small sweetner which is unlikely IMO then powers that be will say Dunfermline is "technically bust" and without intervention would be the same as any other failed organisation.

In thing now is to play the "trading name" card, that is probable in the short term to pacify the Scots.

baby_boomer

At least someone in Scotland isn't giving credence to Fauld's line that the blame lies with London.

Glasgow Herald - The collapse of the Dunfermline is the fault of its executives

"....We had been told repeatedly that this conservative institution was well-capitalised and solvent until, er, it wasn't. Misinforming investors about the financial health of a company should surely be against the law. ..... .

.....And, while we're at it, what on earth was a mutual society, which is supposed to finance mortgage loans from retail deposits, doing buying dodgy mortgages from the American bank GMAC - notorious for the unreliability of its sub-prime assets? A building society is supposed to be owned by its depositors. Did they know about the £650m in commercial property deals? Or its exposure to ambitious IT investments? Or that Dunfermline was in bed with Lehman Brothers, one of the most hard-nosed and aggressive Wall Street investment banks?........"

## - Exactly the points we've been making here for the last few days!

"........The Dunfermline executives do not deserve to be bailed out and rewarded for this failure. Every one of them should have had the decency to have resigned by now. They deluded themselves into thinking that if they played the FSA long enough, and enlisted the political support of the Scottish Government, that they would be bailed out like the big retail banks.

But that was never going to happen. The Dunfermline Building Society is not "too big to fail" and they should have realised that before entering the speculative poker game....."

baby_boomer

bristolleedsfan wrote: »

What ? No mention of a windfall?

I'm sure the small print in the directors' contracts will make up for your disappointment, blf

Twizzle17

We have a morgage with the Dunfermiline Building Society

With the recent news, can someone please tell me if I need to do any thing?


Regards

baby_boomer

Hi Twizzle. Nothing to worry about immediately BUT

You may be more affected than Dunfermline savers.

It all depends who eventually takes over the residential part of the mortgage book.

Keep an eye on developments and especially any change in the Standard Variable Rate of a new provider as your mortgage comes to the end of any introductory rate (which is contractual and therefore won't be affected).

Dunfermline's current SVR of 5.49% was pretty poor anyway, as befits its current troubles.

Perhaps look to switch if you can find a better deal without too many switching charges when the time comes.

Count_Dante

The Herald article baby_boomer linked to is lip smackingly satisfying stuff. Read it.

baby_boomer

Telegraph - Dunfermline to be carved up

The four bidders

"Building societies Nationwide and Yorkshire were lining up last night to buy the assets of their smaller, failing peer Dunfermline – leaving taxpayers to take ownership of the group's "toxic" assets.

HM Treasury officials were in negotiations throughout the day with potential buyers for the deposit book and branch network.......

.......Two banks – with HSBC and National Australia Bank, owner of Clydesdale and Yorkshire banks rumoured as most likely – were also in the negotiations......"

[The FT only has three definite bidders - leaving out NAB.]

LOL. NAB is always mooted as being on the prowl in the UK - but nothing ever comes of it!

Although the Glasgow Herald is flying the flag for NAB (which owns Clydesdale Bank)

Herald - Clydesdale in the frame to tidy up at Dunfermline

It's politically important that a mutual wins. I'm surprised not to see the Co-op in there.

Regarding jobs & possible guarantees to keep the Dunfermline HQ - Nationwide had recently closed half its regional administrative centres in a cost cutting exercise - but of course has since taken on two more from Cheshire and Derbyshire BSs. Will it promise to keep Dunfermline to satisfy the nationalists, and then close those other regional centres?

Yorkshire BS has just got the one admin centre at its HQ in Bradford.

Dundee Courier - Fears over jobs & Dunfermline HQ

".....[West Fife Councillor] Mr Walker said, “I think the £60 million bail-out talked about would have made a huge difference and I am very annoyed that it wasn’t offered.

“In one or two years’ time the society could have recovered, :rotfl: but instead another Scottish institution has been lost.”

“I am disgusted that the UK government has chosen not to spend what would have been a relatively small amount when compared to the billions going on bailing out the banks..."

## Up yours, mate. We've got 2 million unemployed and rising. Why should Dunfermline be a special case? Why not help out every failing business?

baby_boomer

The story has got the sub-editors in a pickle.

One set of headlines says that the government IS bailing out Dunfermline.

Another set says that the government REFUSES to bail out Dunfermline.

The reality is that the government is refusing to support Dunfermline as an ongoing independent entity but it is bailing out the mortgage assets - to make the savings side & branch network a more attractive proposition.

FT - Taxpayer to take on £750 of Dunfermline mortgage assets

"Taxpayers are set to take responsibility for up to £750m worth of loans at Scotland’s largest building society following disastrous investments in commercial property and mortgage-backed securities.

Treasury officials were working through the weekend to engineer a private-sector takeover of the savings accounts and mortgage book of Dunfermline Building Society.

It is understood that taxpayers would be on the hook for its partly toxic commercial loan book after rivals refused to buy the entire group...."

........Chancellor Alistair Darling.. is expected to make a statement to the Commons on Monday, said it would have cost up to £100m to keep the business going..."

## - So those nasty, subversive press speculators weren't nearly nasty enough, , although Prestridge at Financial Mail went out on a limb for £60-£100m eight days ago.

Guardian - Rapid asset expansion during the housing bubble led to Dunfermline being rated in January as the worst building society

## - So what's in those loans the taxpayer is guaranteeing & other societies don't want to touch with a barge-pole? A greater proportion of negative equity than average, I suspect.

"......By the end of 2007, the society's debt securities [mortgages] held as assets almost doubled [in two years] to £772m, from £414m in 2006, the accounts show."

## - Great timing, guys . You picked the top of the boom!

Andrew64

The Independent says:

http://www.independent.co.uk/news/business/news/treasury-brokers-asset-sale-after-dunfermline-collapse-1657150.html

"The proposed rescue deal for Scotland's biggest mutual fell apart at the weekend, leaving the Government poised to take the chancy commercial property loan book into public ownership and Treasury officials feverishly trying to build a deal for the group's healthier retail assets. Big names said to be involved in the discussions include Santander, National Australia Bank and Bank of Ireland, alongside the Nationwide, Yorkshire and Skipton building societies. None of the institutions would confirm their interest last night."

If BoI get it, take your money and run!