Dunfermline BS Stability

baby_boomer

Thanks for that very clear explanation, Rafter.

This still implies that even detoxified BSs are worth less than £0 :eek: Although in this case it's probably the price of Scottish employment guarantees and the political need for a crash sale in under 24 hours.

I still think that Nationwide has picked up an absolute bargain here, unless the housing market is set for further 30% fall. And even then it will be well placed when the recovery eventually starts.

Perhaps only they had the ability to achieve a real bargain because they can keep the Scots happy by maintaining Dunfermline HQ as a regional administrative centre and close a few more of their own instead e.g. in Cheshire & Derbyshire (Duffield Hall).

Times - Having said that, it is the branch staff who have got 3 year employment guarantees and not the HQ staff

What a good original decision by Nationwide not to save the whole Dunfermline basket case if you can pick up this sort of deal instead. What chance any future building society bail outs by other building societies now?

For Scottish workers, this the advantage of having a devolved parliament. It still has some clout in a rearguard campaign, even if it did lose the war. Less good for the English regions .

Will the same principles apply if the West Brom commercial loan book has also gone bad when it reports in late June 2009?

baby_boomer

As the Count & cvd have already said, Peston's latest blog should be compulsory reading for devotees of this thread - It plugs Gordon's line, but is no worse for that, and fills in most of the important details

"......If Dunfermline's savers and borrowers were shareholders in this organisation, rather than members of a mutual, they would probably be incandescent about how little they were told about the risks being run by their society."

Don't worry Robert. We are furious. Faulds, Dalziel & Co need to be roasted in a parliamentary grilling - or on a spit. Either will do.

It's interesting how much English anger is emerging on comments to newspaper sites. Stuff like "we need to build a wall between ourselves and Scotland to protect the British taxpayer".

Here are some key details from Peston

It has made £648m of commercial property loans in Scotland and the North of England. Of that, around £500m of these loans were made in the past three years - which means, in view of the collapse commercial property prices, that losses on these later, top-of-the-market loans are likely to be very significant. In addition, Dunfermline acquired £274m of buy-to-let and self-cert mortgages from the likes of defunct Lehman Bros and from GMAC.

All of these loans, or a bit more than £900m in total, have been hived off and put into what's called the Building Society Special Administration Process, where they'll be managed by KPMG as administrator.

Total losses on these impaired assets are expected to be in the range of £60m to £100m, according to an independent assessment for the FSA that has been carried out by KPMG.

steady__eddie

"I recommend everyone supports their local building society"

WHAT, West Brom, you cannot be serious ? (Well somebody has got to live there I suppose).

D1zzy

Will the same principles apply if the West Brom commercial loan book has also gone bad when it reports in late June 2008?

Why wouldn't it - All Good stuff to Nationwide for free; All bad stuff to the taxpayer ....... where's the problem?

baby_boomer

Computer weekly - Nationwide invests in IT project for current & future mergers

"....Nationwide is investing £300m in a SAP-based banking platform, dubbed Voyager, which will make it easier to transfer customer records from Dunfermline Building Society to Nationwide's core IT systems, said industry watchers...."

asbokid

This from a 2004 Joint Press Release from GMAC and the Dunfermline.....

GMAC-RFC, the UK's 13th largest lender, today announced its first portfolio sale made up solely of buy-to-let mortgages - which will be worth £70 million. The portfolio is being acquired by Dunfermline Building Society, the largest Scottish building society and was completed on 26 February 2004.

"Stephen Hynes, Capital Markets Director at GMAC-RFC says: "It is very exciting to be carrying out our first pure buy-to-let deal. This is also our first transaction with Dunfermline Building Society and we hope it will be the first of many further deals.

"Dunfermline Building Society's Peter Weanie commented: "We are delighted to complete this deal with GMAC-RFC. This purchase represents another significant step in our strategy of continued growth. As Scotland's largest building society, we are always looking to enhance the quality of our assets and our customer base and this is reflected in the growth of our market share."

"GMAC-RFC is the world's number one warehouse lender, and one of the world's largest securitisers. GMAC-RFC is a wholly owned subsidiary of GMAC Financial Services which, in turn,is owned by General Motors Corporation.

GMAC...

How many scalps has it claimed now from the British banking sector? Bradford and Bingley, Derbyshire, Cheshire, Dunfermline...

Today, GMAC is majority-owned by the appropriately named Cerberus Group, a shadowy private equity firm in NY. Cerberus is the name of the three headed dog from Greek mythology that guards the gates to Hell.

I've been wondering for some while now about GMAC/Cerberus, and its exact role in these financial disasters.

Is GMAC a financial "wrecking ball"? Was that its role from the very beginning, or since Cerberus took control?

Is GMAC's toxic debt being used as a tool for consolidating the banking sector?

The boards of financial institutions, including the Derbyshire, Cheshire, B&B, the Rock, and today the Dunfermline, were somehow enticed, bullied or otherwise persuaded, into buying toxic CDOs from GMAC.

Is this a hellish hybrid of the children's party games of Hot Potato and Pass the Parcel? And where 'the parcel' contains a carefully wrapped bundle of GMAC-originated toxic loans?

At some point, when those parcels unravel, the institutions realise they've been sold a pile of worthless junk that's going to ruin them..

But was that the original intention of Cerberus/GMAC? Is that the gameplan of the uber-financiers behind Cerberus?

GMAC's toxic debt is off-loaded onto other institutions for the key purpose of ruining them, and eliminating them from the financial sector. Through those means, the financier oligarchy tightens its grip on the whole banking system, while the taxpayer, as ever, is left with the mammoth clean up bill for the bad loans.

Which other building societies (and banks) are still holding GMAC's CDOs today?

edda

asbokid wrote: »

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!

This information is in the public domain - and you can buy it.

There are 5 directors (who are named) and 1 employee.
Latest filed accounts were for 31st December 2007 when a pre-tax loss of £8m was declared.
Sorry I can't post the names but I looked up the details at work and the licence prevents me from passing such info on.

BTW, 2 people only became directors in January.

D1zzy

baby_boomer wrote: »

Computer weekly - Nationwide invests in IT project for future mergers

"....Nationwide is investing £300m in a SAP-based banking platform, dubbed Voyager, which will make it easier to transfer customer records from Dunfermline Building Society to Nationwide's core IT systems, said industry watchers...."

SAP!!!!!! - that'll be the end of Nationwide as their employees descend into madness - how much did Dunfirmline write off aganst failed IT development

baby_boomer

I was surprised to see the article describe the merger of Portman / Nationwide accounts as a "success". Anyone involved on the sharp end knows that it was an unmitigated disaster.

And they haven't even merged the mortgage operation yet.

That's why they have been happy to let Cheshire / Derbyshire / Dunfermline operate as separate brands.

Hot property UK - Dunfermline BS to keep its name

baby_boomer

Independent - £1.6bn sale of Dunfermline was the only option

Alex Salmond continues to snipe away - deliberately misconstruing the newspaper headline figures

"....Scotland's First Minister Alex Salmond hit out at the cash being paid to Nationwide to take over the profitable parts of the ailing Dunfermline. "Nationwide are going to be paid over £1 billion by the Treasury - while the Treasury takes on, on behalf of the public, the less good bits of the book, the commercial loan book," he told BBC Radio's The World at One.

"Why wasn't it a good idea to spend a fraction of that amount on allowing the organisation to trade forward as an independent entity?"

But some good news.

Dunfermline's board - including chief executive Jim Willens, who is a former board director of Nationwide - will resign after the takeover."

## - Sub-editors love big numbers. IIRC it's not going to cost the UK taxpayer the headline numbers.

Daily Mail misinformation services - Nationwide is paid £1.6bn of taxpayers' money