Dunfermline BS Stability

bristolleedsfan

jack_spratt wrote: »

This is how mutual societies act !!they would step in and rescue the under preforming society!! keep it in the family so to speak

No executive pay/payoff is ever affected by such under performance is it. ???

baby_boomer

Times - Dunfermline bosses reassure investors

" “Like all banks and building societies our members are protected by the Financial Services Compensation Scheme.”

Bloody hell. Is that the best they can do after a week's silence :eek: We all know that!

Less reassuring for the society's future, as opposed to savers with £50K or less in the society are the facts.

"....The capital stock held by the building society, which mainly comprises accumulated profits and which was available to cover any losses on these loans, had fallen to 4.4 per cent of the loan portfolio in 2007. Since then, the FSA has raised the capital requirement to about 8 per cent, which the society could have met by raising the amount of profit it made in 2008. But instead, it is believed to have made a loss of £26 million, which is about 1 per cent of its loan portfolio, making it extremely difficult to meet the new FSA requirements...."

Scotland on Sunday - Doubts cast over the legality of the SNP's proposed £25m bail out

Would it fall foul of competition law? - In addition to issues of devolved v reserved powers under devolution, which the article doesn't mention?

Scotland on Sunday -Tug of war over Dunfermline between Edinburgh & Westminster

The FSA & Treasury want Dunferline to find the £25-30m it needs privately, or through the BS movement. But the other BSs are having their own problems.

In the end the Treasury may have to cough up, in the form of letting Dunfermline access the Special Liquidity scheme, (the government would own PIBs in the society) in order to see off a political victory for Alex Salmon and the SNP.

Sunday Herald, struggling for a newsbreaking story, - FSA "could have saved Dunfermline six months ago"

(Can you imagine the Herald's own nationalist howls of protest had the FSA forced Dunfermline prematurely into a merger with an English BS :rotfl: ) Perhaps the Herald should be directing its fire more in the direction of the Dunfermline directors and their flawed bonus schemes which drew them into commercial lending?

"The FSA was made aware of Dunfermline Building Society's unfolding problems six months ago but failed to help find a solution for the Fife mutual's deteriorating position..."

Although that begs the question how the Chairman, in December 2008, could have praised the outgoing chief executive for leaving the society in a stronger position than he found it.

Jim Faulds needs to be taken to task at the AGM for lying to members and the press.

Count_Dante

Apparently "He retired from Dunfermline at the end of 2008 having agreed that, after 10 years, the time was right to “pass the baton” to his successor." Obviously 'the time was right' just before the proverbial hit the fan due to his errors of judgement.

http://www.carnegieenterprise.com/shapingthefuture/gdalziel.html

Oh yeah, he looks a right smug git.

Andrew64

Looks like the government will have to bail it out as other building societies like Nationwide won't touch it with a bargepole!

http://www.thisismoney.co.uk/news/article.html?in_article_id=480850&in_page_id=2&ct=5

"Financial Mail understands that Dunfermline is technically bust as a result of massive losses incurred on its commercial property and residential loan books. The dire state of these mortgage portfolios, which account for more than a third of the society's £3bn of assets, means the business has negative net value."

"Dunfermline's 2008 accounts are overdue after auditor Deloitte & Touche refused to sign them off, fearing the society was insolvent. Some leading administrators have been sounded out about the possibility of running it."

"In recent weeks, a number of major building societies, including Britannia, Nationwide and Yorkshire, have been approached - at the prompting of the Financial Services Authority - to take over the ailing Dunfermline. But in a break with tradition, where strong societies usually rescue weaker ones to save the sector as a whole from financial scandal, these mutuals have steadfastly refused to act."

baby_boomer

Good old Jeff Prestridge at Financial Mail on Sunday. He's scooped the two main Scottish broadsheets in their own back yard :rotfl:

Reuters picks up entirely on his article and ignores the Scottish papers

IIRC, only the top three societies - Nationwide, Britannia & Yorkshire can take over Dunfermline without putting it to a vote by their OWN members.

This rule has been waived once, when the FSA wanted the Skipton to take over the Scarborough.

But the FSA can't keep doing this IMHO. And it's only a starter if the takeover management is strongly in favour. But how could they sell it to their own members? I would oppose any society of which I was a member that tried.

jack_spratt wrote: »

This is how mutual societies act !!they would step in and rescue the under preforming society!! keep it in the family so to speak

It could be the end of an era, mate. The fiduciary duty of each society's board is to its own members, not mutuality in general - and these are scary times.

Financial_Mail wrote:

Earlier this month, ratings agency Standard & Poor's downgraded its outlook for Nationwide, the country's biggest building society, from 'stable' to 'negative' and warned that it would downgrade further if it were to take over another struggling competitor. In the past year, Nationwide has already rescued Cheshire and Derbyshire, both victims of irresponsible lending and, like Dunfermline, exposed heavily to the imploding commercial property market

How ironic, given the Scots' historic reputation for prudence and financial probity, that it should be the one Scottish BS in the top 40 building societies that let the movement down.

geepster

Count_Dante wrote: »

Apparently "He retired from Dunfermline at the end of 2008 having agreed that, after 10 years, the time was right to “pass the baton” to his successor." Obviously 'the time was right' just before the proverbial hit the fan due to his errors of judgement.

http://www.carnegieenterprise.com/shapingthefuture/gdalziel.html

Oh yeah, he looks a right smug git.

It isn't just the CEO who should be blamed. Where are all the other board members? Non execs sometimes aren't worth a candle if things like this go on and they don't shout about it or even claim not to have known what's been going on as sometimes seems to be the case.
It really is high time all these directors of banks and building societies were held to account for the actions taken by their organisations. Ultimately, they are responsible and they certainly get paid more than enough for the job they do.:mad:
As far as non execs are concerned, so often it seems that it is "jobs for the boys" and it really has got to stop. It's really about time that we, as customers, made much more noise about all of this. Ok rant over.;)

baby_boomer

Dunfermline's race against the clock

By law the latest day for its AGM is Thursday 30 April.

By law it has to get summary financial statements to ALL members by Thursday 9 April.

But first it sounds like it has to get the accounts signed off, the chairman's letter to members written [that may take a few drafts ] and the summary financial statements printed, addressed & got through the British postal system second class [they can't afford first class].

In the meantime they've got all these Scottish politicians demanding to meet them, and more meetings with possible rescue candidates, plus a few emergency board meetings.

With so much extra work on our behalf, they must surely deserve to pay themselves an extra bonus :rotfl:

RayWolfe

baby_boomer wrote: »

In the meantime they've got all these Scottish politicians demanding to meet them, and more meetings with possible rescue candidates, plus a few emergency board meetings.

With so much extra work on our behalf, they must surely deserve to pay themselves an extra bonus :rotfl:

And very well deserved it will be too.
Perhaps they could all retire early as well and take an enhanced pension. It seems to be the Scottish way of doing business.

baby_boomer

RayWolfe wrote: »

Perhaps they could all retire early as well and take an enhanced pension. It seems to be the Scottish way of doing business.

The boss already has. We await the accounts with interest to see how well he has been rewarded for landing everyone else in the mire.

Meanwhile, how's this for Sang Froid when Reuters asked them about Sunday's revelations.

"We will continue to look after our members' best interest, and it is very much business as usual," :rolleyes: a spokewoman told Reuters.

Telegraph - Government thought to be riding to Dunfermline's rescue with £60m of taxpayers' money

Is this "business as usual" ?

Anyway, I'll be doing my bit to help reduce Dunfermline's future administrative costs by closing two accounts first thing on Monday.

bristolleedsfan

baby_boomer wrote: »

Anyway, I'll be doing my bit to help reduce administrative costs by closing two accounts first thing on Monday.

Snap, thus ending a 12 year ish relationship. _pale_

No post from miserlymartin, :rolleyes: always had a lot to say blaming the "carpetbaggers" when a couple of the former Building Societies were considered "technically bust" :rolleyes: