Just when you think the worst is over another fatal blow hits the Scottish Financial Services Sector. To the despair of many North of the border, the financial crisis’ latest victim is no other than one of Scotland’s most well known regional institutions: the Dunfermline Building Society. The society is a mutually owned organisation that had been established across many Scottish high streets for well over 100 years. The Building Society had 34 branches and 530 employees across Scotland and certainly played a proud part in the success story of the Scottish Financial Services Industry.

So where did it all go wrong? In the wake of a deteriorating economic environment the organisation were expected to announce a loss of around £26 million primarily due to their commercial loan book. However, that aside their Chairman Jim Faulds has been reported suggesting that their other assets were of good quality and on track to land them a marginal profit. Amidst their relevantly robust businesses in other areas of operation, DBS were hoping that the Government would come to their aid with a £100 million rescue package to shore up their balance sheet, it never came.

In a bid to safeguard depositors funds and find a suitable buyer the Government stepped in and invited organisations to bid for its various assets and liabilities. From this exercise, Nationwide has gained Dunfermline’s branches, good loan book and deposits. One saving grace is the fact that the brand will still remain for now as part of Nationwide’s Regional strategy.

Interestingly, there were a number of alternative bidders that could have kept the Society in Scotland, however their efforts to pull together a ‘Scottish Consortium’ came to no avail as Nationwide clinched the deal.