Dunfermline Building Society
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Issued 30 March 2009
Chancellor of the Exchequer and the Governor of the Bank of England
have today announced a resolution for the Dunfermline Building Society
that protects depositors, and provides a more stable and secure future
for the society’s members.
It is business as usual for all
customers. Dunfermline’s deposit business will continue to operate
normally. Branches and telephone banking will continue to open during
their normal hours and customers can deposit and withdraw their money
in the usual ways. Savers can be assured that their money is
Loan and mortgage customers can continue to contact Dunfermline in the
usual way and should continue to make repayments as normal.
Dunfermline’s staff have been transferred to Nationwide.
the Banking Act 2009, Dunfermline’s retail and wholesale deposits,
branches, head office and originated residential mortgages (other than
social housing loans and related deposits) have been transferred to
Nationwide. This follows a competitive process conducted by the Bank of
England over the weekend of 28-29 March under the Special Resolution
Regime provisions of the Banking Act 2009.
housing portfolio has been placed into a bridge bank, wholly owned by
the Bank of England. This will allow the Bank of England and the
Treasury to determine the best outcome for this part of Dunfermline’s
business and underlines the Government’s commitment to maintaining the
availability of lending to Registered Social Landlords. The Government
is talking to a number of people, including the Scottish Government,
about securing a long-term future for the social housing book.
court order was made earlier today to place the remainder of
Dunfermline’s business into the Building Society Special Administration
Process (BSSAP) and to appoint KPMG as the administrator. This part of
the business includes commercial loans, acquired residential mortgages,
subordinated debt and most treasury assets.
When considering the
appropriate action to take, the Treasury took account of the scale of
future losses faced by the society, the additional capital that would
be required, and its very limited capacity to service new capital given
its historically low level of profitability. It concluded
injection of funds by the taxpayer would not be likely to provide value
for money and would not provide a sustainable and lasting solution to
the problems faced by the society.
On 28 March 2009, following
the required consultation with the Treasury and the Bank of England,
the Financial Services Authority (FSA) found that the general
conditions for entry into the Banking Act Special Resolution Regime
were satisfied in the case of Dunfermline Building Society. The Bank of
England, having consulted the FSA and Treasury, considered the overall
package offered by Nationwide to best meet the objectives of the
Special Resolution Regime and the Treasury provided consent for the use
of public money.
Today’s announcement also demonstrates the
Government’s support for the wider mutuals sector and the important
role that mutuals play in communities throughout the country.
1. Further details can be found on the Bank
Of England website .
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Article Published/Sorted/Amended on Scopulus 2009-03-31 14:08:31 in Business Articles