Page last updated at 14:33 GMT, Monday, 30 March 2009 15:33 UK

Positivity amid gloom in Dunfermline

Dunfermline Building Society
Dunfermline Building Society has been saved from collapse

News that the Dunfermline Building Society is to keep its name has been described as "a bit of positivity in amongst the gloom" by a local business leader.

Janet Torley, the chairwoman of the Fife Federation of Small Businesses, said people in the Fife town which gave the society its name were proud of the well-known brand.

She also described guarantees that there will be no compulsory redundancies at branches over the next three years as "fantastic".

However, there was a mixture of shock and anger from customers in the town after it was announced that Scotland's biggest business society had been sold.

After 48 hours of uncertainty over the future of the institution, it emerged on Monday that the Nationwide had bought its retail and wholesale deposits, branches, head office and most of its residential mortgage book.

The Treasury has placed the Dunfermline's £500m social housing portfolio into a bridge bank, owned by the Bank of England.

Dunfermline Building Society customers give their reaction to the takeover

The remainder of the business - risky assets worth more than £900m - has been hived off and placed in the Building Society Special Administration Process.

The Nationwide said there may be job losses in its back office and support operations, but told the UK Government that there would be no compulsory redundancies at branches for three years.

The new owner also said the 140-year-old society would keep its name.

Ms Torley said this was "absolutely fantastic news".

"It is a well-known Scottish brand and something Dunfermline people are proud of because it is such a long-standing institution," she said.

She also described the pledge on compulsory redundancies at branches as "incredibly good news".

"This is a bit of positivity in amongst the gloom," she added.

'Positive outcome'

Alan Russell, the chief executive of Fife Chamber of Commerce, voiced his disappointment at the loss of such a "significant" financial head office from Fife.

"We feel that the government could have done more to save the Dunfermline Building Society in its entirety," he said.

"However, the takeover by the Nationwide is welcome as we understand that it will protect branches, the staff, good loans and savings - a positive outcome in the short-term.

"We also welcome the fact that the Nationwide has declared it will retain the Dunfermline Building Society brand. We hope that any rationalisation will keep any potential job losses to a minimum."

The staff here are excellent and I feel sorry for them
John Aitchison
Dunfermline customer

The building society, which has 34 branches, was founded in the Fife town in 1869.

Customer David Stephen visited the branch outside the Dunfermline's headquarters on Monday morning to make sure his life savings were safe.

The 67-year-old retired gardener blamed the society's problems on "utter incompetence from the people who run the company".

He added: "I've been a member here for a long time, got a lot of money invested with them.

"They've been a great company, a friendly company, no question about that. Then suddenly this collapse. It's quite disgraceful."

Another Dunfermline customer, 61-year-old John Aitchison, said he had been surprised at the speed of the developments which led to the rescue deal.

'Worrying time'

He said: "We knew there were problems - that had been flagged up - but compared with the likes of RBS it's a drop in the ocean.

"It just seems strange that they've suddenly pulled the rug.

"The staff here are excellent and I feel sorry for them."

Diane Grieve, 45, said: "It's quite a scary time for one of the oldest building societies in Scotland to be faced with this."

The lecturer said the Dunfermline's troubles seemed to have "come out of the blue".

"It must be a worrying time for the staff as well," she added.

Local Liberal Democrat MSP Willie Rennie said it had been a traumatic 10 days for the 530 staff employed by the building society.

"We now need a period of stability so that they can focus on making the Dunfermline great again," he said.

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