Dunfermline BS Stability

baby_boomer

The MSE boys & girls have put together a helpful "official" article for Dunfermline savers and borrowers about the Nationwide takeover

I assess the situation as follows:

1) Savers - stand by for better rates (OK we can discuss this )
2) Residential borrowers - stand by for much better rates when your fixed term deal comes to a close.
3) Taxpayers - stand by for the bill
4) Savers who as a result of the merger have more than £50K with the merged society. Don't worry for now as you're covered, possibly up to £100K, but watch out for future announcements.

cvd

It will be interesting to see what Nationwide pays.

Peston has now added some numbers to his blog: the taxpayer is paying £1.5bn to the Nationwide (update 11:10). But his whole article is a gem.

Andrew64

According to the latest reports, the government is PAYING Nationwide 1.6 Billion to take over Dunfermline!

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6000797.ece

The Government has been forced to pay out around £1.6 billion for a portfolio including toxic loans and questionable mortgages as part of the rescue of Dunfermline Building Society by Nationwide Building Society today, The Times has learnt. The Treasury is understood to have made the cash payment to Nationwide, which this morning agreed to take on the healthy parts of the Dunfermline, including its 300,000 strong army of depositors, in a rescue deal hastily put together over the weekend.

Count_Dante

From Peston:

And finally, for me perhaps the most shocking element of the Dunfermline debacle is what it has revealed about the uselessness of their 2007 annual accounts. It's impossible to identify in these the size or nature of its exposure to commercial property.

I hold those Dunfermline members protesting about the Nationwide takeover in contempt. They should be angry at the previous Dunfermline management for mismanaging their building society!

scott_lithgows

Megalomaniac wrote: »

Nationwide was the last society I wanted to see take it over... there goes any decent savings rates!

I do wonder if they will be kept as a seperate organisation to the Nationwide. In Aberdeen, the two branches are literally opposite each other on Union Street and obviously wouldn't make much sense keeping both if Dunfermline was 'consumed'. I'm sure there are other Scottish high streets where this is a similar case.

May I suggest then...18 Victoria St for the Scottish Building Society.(and before any anti-scots posts.I recommend everyone supports their local building society)
[FONT=arial, helvetica, sans-serif]Scottish Building Society[/FONT]
[FONT=arial, helvetica, sans-serif]18 Victoria Street, Aberdeen AB10 1XA[/FONT]
[FONT=arial, helvetica, sans-serif]T: 01224[/FONT][FONT=arial, helvetica, sans-serif]622900[/FONT]

Robert_Sterling_3

Nationwide has come to the rescue today.

Trollfever

Where was the FSA when Dunfermline was being stupid?


.

asbokid

baby_boomer wrote: »

It took the press a while to uncover this.

"The Dunfermline Building Society, which is expected to accept a taxpayer bailout reported to be in the region of £60m, has poured £31m into a loss-making subsidiary it set up to develop a specialist mortgage IT system.

## Doh! And we thought we were just saving with a boring building society, when all the time we were providing the management with share capital, which they hadn't mentioned to members :eek: .
[...]
".....Asked yesterday whether the project to develop the new business had now been aborted, the Dunfermline declined to respond..."

No medium sized societies do anything other than dabble in commercial lending (not 15% of their loan book) or develop their own IT rather than buying it off the shelf.

There's a whiff of Robert Maxwell to all of this.. We have the ever elusive, enormously complex and hideously expensive IT project.

In the case of Maxwell, his cash cow was a software package called 'Promis'.. Noone ever caught sight of it, but it was going to be worth billions, donchaknow.

Not a single line of code was ever delivered. The software was perennially 'in development', funded, of course, by other people's hard earned cash - pension holders, investors, etc..

Just curious, but who exactly are the directors of Dunfermline Solutions Ltd, the software house that plundered the Society's capital, and delivered nothing?

I think we should be told!

FraudBuster

but who exactly are the directors of Dunfermline Solutions Ltd

It will cost you £1 from Companies House.


Name & Registered Office:
DUNFERMLINE SOLUTIONS LIMITED
CALEDONIA HOUSE
CARNEGIE AVENUE
DUNFERMLINE
KY11 8PJ
Company No. SC113203


Status: Active
Date of Incorporation: 01/09/1988

Country of Origin: United Kingdom
Company Type: Private Limited Company
Nature of Business (SIC(03)):
7260 - Other computer related activities
7487 - Other business activities
Accounting Reference Date: 31/12
Last Accounts Made Up To: 31/12/2007 (FULL)
Next Accounts Due: 31/10/2009
Last Return Made Up To: 13/03/2008
Next Return Due: 10/04/2009
Last Members List: 13/03/2008
Previous Names:Date of changePrevious Name13/02/2003DUNFERMLINE FINANCIAL SERVICES LIMITED08/04/1991DBS FINANCIAL SERVICES LIMITED

Rafter

Andrew64 wrote: »

According to the latest reports, the government is PAYING Nationwide 1.6 Billion to take over Dunfermline!

Andrew,

Not quite how it works.

Nationwide now 'owes' the savers of Dunfermline £2.5bn. In return it received £1.0bn of mortgages that will hopefully repay over the next few years.

It is therefore owed £1.5bn by the government to cover the difference between the two and also received some cash to pay for the reorganisation and the risk that the mortgages it was taking on weren't too great.

The government has kept the rest of Dunfermlines assets including £500m of loans to housing associations - should be repaid these ones given the government owes this money to itself. What is less certain is what the losses will be on the dodgy mortgages acquired by dunfermline and the commercial property loans that caused the takeover to be required in the first place.

Tax payers and the rest of the savings industry are now on the hook for that in the same way that they are for the bailout of Bradford and Bingley and the Icelandic banks.

R.