Page last updated at 13:26 GMT, Sunday, 29 March 2009 14:26 UK

History: Dunfermline Building Society

The Dunfermline is to be put up for sale by the government after it effectively collapsed with a massive loss.

Here, the BBC Scotland news website outlines the building society's history from its conception in 1869 to being put on the market in 2009.

29 MARCH 2009
Jim Faulds

Prime Minister Gordon Brown moved to reassure savers in the Dunfermline that their money was safe.

His comments came as Scotland's largest building society effectively collapsed after incurring losses last year of £26m.

The Treasury ruled out a taxpayer-funded bailout of between £60m and £100m after regulators decided the move was not viable.

The building society's chairman Jim Faulds criticised Treasury officials who he said had refused to talk to the Dunfermline to help secure its future.

28 MARCH 2009
Jim Murphy

Regulators decided the Dunfermline was no longer viable, with a £26m loss expected to be announced next week.

The Bank of England, the Financial Services Authority (FSA) and the UK government forced the sale of the building society.

Scottish Secretary Jim Murphy said the Dunfermline's exposure to risky assets, £9m plus losses on its IT business and its involvement in the subprime mortgage market had "jeopardised its entire future".

First Minister Alex Salmond said the Scottish Government had offered a capital contribution to help maintain the Dunfermline as an independent institution, and to provide guarantees that would protect its role in lending for social housing in Scotland.

23 MARCH 2009
Man walking past a Dunfermline branch

The Dunfermline was involved in intensive talks with the financial regulator over its future.

It came after speculation that the mutual was having problems with its cash flow and needed an injection of capital.

Scottish Secretary Jim Murphy and Deputy First Minister Nicola Sturgeon pledged that their administrations would do whatever they could to help the building society.

The Dunfermline refused to comment on the story.

Bank of England sign

Bank of England figures showed that UK building societies appeared to be lending only a handful of new mortgages to home buyers.

The statistics suggested the Dunfermline had become more cautious, particularly about lending on newly built properties, such as those in city centres or waterfronts.

Its operations director, Peter Craigie, said its residential mortgage pipeline at the end of July was down 50% on a year ago.

He said the building society was expecting a quieter second half of the year.

Dunfermline flag

The Dunfermline is now one of only two lenders in the 100%-plus mortgage market.

The building society and Scottish Widows were the only providers left offering 100% mortgages, after the Bradford and Bingley and Mortgage Express pulled deals.

The mortgage and loan deals which allow people to borrow more than the value of their home had been criticised for letting people take on large debts.

Birmingham Midshires, the last lender offering so-called 125% mortgages, pulled them from the market.

Poster on a Dunfermline branch window

The Dunfermline reported profits of £2.2m.

This was 61.4% down on the previous year.

The building society announced that it would become sole funder of Weslo Housing Management, the Bathgate-based registered social landlord in a £34m deal.

This took the Dunfermline well above the £600m mark in respect of social housing lending.

Dunfermline branch

In December, the building society had total assets of £3.3bn.

By the end of the previous year, it had 34 branches and 38 agencies throughout Scotland.

About 20% of its business was generated from outwith Scotland.

The society was also leading the way in investment in social housing north of the border.

Dunfermline ATM

The building society launched its telephone banking service, Dunfermline Direct.

The mutual said it complemented its existing network of 34 branches and provided services to those who do not work or live close to a branch.

It said it was introducing new services "to meet the demands of the modern world".

The new system provided a range of accounts and services to those who found it more convenient to transact business by telephone.

Dunfermline's head office

The Dunfermlines's new head office was opened.

Caledonia House was built at the south side of Dunfermline, on Carnegie Campus.

The building society's website said its construction showed "an ongoing commitment to our customers, staff and the society's future".

The mutual has been based in the Fife town since its formation in 1869.

A view of Dunfermline

The building society was established in the town from which it takes its name.

It was formed as a mutual organisation and, according to its website, "profits made are sufficient only to provide for the costs of the business".

It expanded throughout the 19th and 20th Centuries and acquired more than 20 other organisations.

These included the Stenhousemuir, Peebles, Fourth Fifeshire Investment Company, the Stirlingshire, and the Edinburgh and Paisley Building Society.

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