Dunfermline Building Society to be bailed out
The Government was close last night to a take-over of the toxic assets of Scotland's largest building society.
Ministers were negotiating the sale of the profitable parts of the Dunfermline Building Society. It is expected that its deposits and network of branches will be sold to another building society, while its loan book will be brought under state control. The Treasury said at least £60m of public money would be needed to stop the mutual collapsing.
The deal, which could be confirmed today, has sparked recriminations between the Scottish Nationalist administration in Edinburgh and the Treasury in London.
Alistair Darling, the Chancellor, confirmed that Dunfermline would receive a cash injection from the taxpayer to secure its future. It has been exposed to loans of more than £650m on commercial property.
He said its problems were too deep for a short-term fix and it needed between £60m and £100m to keep going. Mr Darling said: "It couldn't even service that sort of loan, let alone repay it."
The 130-year-old mutual is expected to announce losses this week of £26m.
But Jim Faulds, its chairman, said the take-over was unnecessary and a "scandal". He insisted Dunfermline had a viable long-term future and that its problems were not as bad as had been portrayed: "We cannot get the faceless mandarins in London, who will not speak to us, to sit round a table and see that we have a sustainable future."
The SNP condemned the "appalling nature of the process undertaken by UK authorities, and in particular the behaviour of the Treasury".
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Greece debt crisis explained: A history of just how the country landed itself in such a mess
German conservatives are destroying Europe with austerity, says economist Thomas Piketty
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
£16000 - £30000 per annum: Recruitment Genius: They are looking for individual...
£25000 - £40000 per annum: Recruitment Genius: A Project Coordinator is requir...
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
£20000 - £40000 per annum: Recruitment Genius: Trainee Vehicle Inspectors / Pu...