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Dunfermline Building Society facing collapse

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by Peter Charalambous
 Dunfermline Building Society facing collapse

Scotland’s largest building society is set to be on the brink of collapse as the UK government has announced that it is preparing a £60 million bail-out.

Scottish Secretary Jim Murphy said that the Government will do all that it can to protect people’s money in what has been nicknamed as the Scottish Northern Rock.

Dunfermline building society has over 34 branches and 250,000 savers and back in 2007 made a profit of £2 million but it has now emerged that the Building Society has losses as high as £90m even though initial estimates produced a figure of £26m.

Deloitte & Touche would not sign the accounts off and administrators had been approached although the Building society has been much maligned by recent stories Jim Willens the chief executive of Dunfermline has made a statement to customers on the building society’s website that their money is safe.

In the cases of the Cheshire and Derbyshire building societies last year Nationwide took them over although further rescue deals have been written off as Nationwide is unwilling to risk further ratings downgrades and it is this that has caused the government to step in.

John Goodfellow the chairman of the Building Societies Association has said that Government action may not be needed as the industry felt that as in the past it was able to deal with its own difficulties.

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News posted: March 23, 2009

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