Nationwide is to buy the Dunfermline’s offices, savings accounts and prime mortgage book, as the latter failed to secure the Government backing it needed to remain independent.
With losses of over £24m Scotland’s largest building society has been seeking Government support for some months. This was ultimately ruled out over fears that the building society would need more that the initial £60m injection, and questions as to whether it could meet its commitments.
Assets not wanted by Nationwide include £500m of social housing mortgages, which have been placed into a bridge bank, owned by the Bank of England. These are considered good quality loans and a buyer will be sought.
Around £900m of commercial mortgage lending (much of it made at the height of the market) and buy-to-let and self-cert mortgages purchased from Lehman Brothers and General Motors, has been placed in the Building Society Special Administration Process, where it will be managed by administrators KPMG.
All of Dunfermline's staff have been transferred to Nationwide, who plan to retain the Dunfermline name.