Monday March 30, 10:20 AM
Nationwide saves Dunfermline after govt backs out
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LONDON (AFP) - Scotland's biggest building society has been saved from collapse by being sold to the larger lender Nationwide, after the government failed to come to the rescue, the Bank of England said on Monday.
The government had originally vowed to step in to keep the Dunfermline Building Society independent, but pulled out and a rescue deal was put together over the weekend with the Nationwide Building Society.
Under the agreement, Nationwide has taken on Dunfermline's retail and wholesale deposits, its branches, head office and most of its residential mortgage book.
Building societies, or mutuals, are owned by their members and are not listed on the stock exchange. They also specialise in home loans.
Dunfermline chairman Jim Faulds voiced disappointment that the government did not step in.
"We are deeply disappointed with the government's decision. It was unnecessary. But nevertheless we need to move on and we need to work with the new owners," he told BBC radio.
According to the BBC, the Bank of England, the Financial Services Authority (FSA) and the government decided Dunfermline was no longer viable and forced its sale.
Dunfermline, established in 1869, employs almost 500 staff and has a network of 34 branches.
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