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Nationwide takes over Dunfermline Nationwide takes over Dunfermline
(30 minutes later)
The Nationwide is to buy the Dunfermline Building Society's branches, good loans and deposits, it has been confirmed.The Nationwide is to buy the Dunfermline Building Society's branches, good loans and deposits, it has been confirmed.
The mutual was put up for sale after incurring losses of £26m.The mutual was put up for sale after incurring losses of £26m.
The Nationwide will also take on Dunfermline's 530 staff, according to the BBC's business editor Robert Peston. The Nationwide, which will take on the Dunfermline's 530 staff, said the brand would remain intact.
The Treasury will take over £1bn of commercial property lending and acquired portfolios of mortgages. The Treasury will take £1bn of commercial property lending and acquired mortgage debt. Scotland's first minister welcomed the deal.
The deal with the Nationwide has emerged less than 48 hours after the UK Government announced that the building society was to be put on the market. The agreement with the Nationwide was struck less than 48 hours after the UK Government announced that the building society was to be put on the market.
Robert Peston said Britain's largest building society was the natural buyer of the good parts of the Dunfermline and that it has a strong track record of absorbing weaker societies. The Bank of England used new powers under the Banking Act to rush through the deal and prevent the Dunfermline - Scotland's largest building society - from going bust.
He said the deal would also preserve the brand name of the society. There are still Cheshire and Derbyshire branches, even though these two societies have recently been bought by Nationwide. The Nationwide has bought the Dunfermline's retail and wholesale deposits, branches, head office and most of its residential mortgage book.
'Deeply disappointed' The Bank of England said: "It is business as usual for all customers. Dunfermline's deposit business will continue to operate normally.
"Savers can be assured that their money is safe. All of Dunfermline's staff have been transferred to Nationwide."
The Nationwide confirmed that the Dunfermline brand would remain intact after the deal.
The Treasury is due to reveal later how much was paid by Nationwide and any taxpayer liability.
Chancellor Alistair Darling had said the Dunfermline would have needed between £60m and £100m to keep it going because of its exposure to risky assets.Chancellor Alistair Darling had said the Dunfermline would have needed between £60m and £100m to keep it going because of its exposure to risky assets.
But the Treasury ruled out a full government bailout after regulators said the move was not sustainable.But the Treasury ruled out a full government bailout after regulators said the move was not sustainable.
However, the Dunfermline's outgoing chairman, Jim Faulds, had claimed government funding of £20m-£30m would have helped secure its future and dismissed claims the building society had debts linked to the toxic US sub-prime mortgage market.However, the Dunfermline's outgoing chairman, Jim Faulds, had claimed government funding of £20m-£30m would have helped secure its future and dismissed claims the building society had debts linked to the toxic US sub-prime mortgage market.
'Rock solid'
Mr Faulds said he "warmly welcomed" Nationwide's involvement but was "deeply disappointed" that the government did not provide the support needed for the building society to continue as an independent operation.Mr Faulds said he "warmly welcomed" Nationwide's involvement but was "deeply disappointed" that the government did not provide the support needed for the building society to continue as an independent operation.
He said the Nationwide was "a first-class operation" by which existing Dunfermline members would be "well served".He said the Nationwide was "a first-class operation" by which existing Dunfermline members would be "well served".
But he added: "What we needed was not capital but access to the liquidity scheme and the Financial Services Authority raised the bar for access to the liquidity scheme.But he added: "What we needed was not capital but access to the liquidity scheme and the Financial Services Authority raised the bar for access to the liquidity scheme.
I think it's good news that the jobs have been secured within the Dunfermline Building Society as part of the deal Willie Rennie MPI think it's good news that the jobs have been secured within the Dunfermline Building Society as part of the deal Willie Rennie MP
"We were not asking for money to be given to us. We were asking for a loan, which would have been repaid with interest."We were not asking for money to be given to us. We were asking for a loan, which would have been repaid with interest.
"We could have serviced a loan of between £20-£30m. That's what we think we needed. It would have been secured against a good property book and a social housing book that's rock solid.""We could have serviced a loan of between £20-£30m. That's what we think we needed. It would have been secured against a good property book and a social housing book that's rock solid."
The Scottish Government had offered money to help keep the Dunfermline going, but did not get Treasury approval for the move.The Scottish Government had offered money to help keep the Dunfermline going, but did not get Treasury approval for the move.
First Minister Alex Salmond has expressed disappointment that the building society could not continue as a going concern. First Minister Alex Salmond said while it was great that 530 jobs at the mutual had been safeguarded, he said there were still some outstanding questions.
The Dunfermline was founded in the Fife town from which it takes its name in 1869, and has 34 branches.The Dunfermline was founded in the Fife town from which it takes its name in 1869, and has 34 branches.
A protest at the sale is planned in the town on Monday morning.A protest at the sale is planned in the town on Monday morning.
However, the local MP, Liberal Democrat Willie Rennie, welcomed the takeover.However, the local MP, Liberal Democrat Willie Rennie, welcomed the takeover.
"I think it's good news that the jobs have been secured within the Dunfermline Building Society as part of the Nationwide deal," he said."I think it's good news that the jobs have been secured within the Dunfermline Building Society as part of the Nationwide deal," he said.
"Employees must have been thinking over the weekend about their jobs and future, it's a traumatic experience.""Employees must have been thinking over the weekend about their jobs and future, it's a traumatic experience."
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