Forced sale of building society

[Sockpuppet]

Good to see they're not missing the point its scottish and this is the "sole" reason that its the English pigs ******* it over.

£100m for 500 low paid fife jobs not bad is it.

[TykeMerc]

It was a fascinating interview this morning with the dork who runs this busines.

Let's see - he destroys the business by overseeing high risk ventures and unbelievably stupid deals resulting in the business making catastrophic losses and basically being declared bankrupt......but it's the TREASURY'S fault that his business is going bust because they have refused to bail it out.

And this is the sort of cretin that we are told deserves their high salaries and bonuses because it "costs a lot to stop people of their calibre going somewhere else"??

I wouldn't be surprised to see another brick going through another window soon.....

Fair comment, I agree completely that the bloke's a total pillock.

[GreenerGrass]

It was a fascinating interview this morning with the dork who runs this busines.

Let's see - he destroys the business by overseeing high risk ventures and unbelievably stupid deals resulting in the business making catastrophic losses and basically being declared bankrupt......but it's the TREASURY'S fault that his business is going bust because they have refused to bail it out.

And this is the sort of cretin that we are told deserves their high salaries and bonuses because it "costs a lot to stop people of their calibre going somewhere else"??

I wouldn't be surprised to see another brick going through another window soon.....

I was just as gobsmacked as you listening to that cretin today. I couldn't work out how it was the treasury's responsibility to do anything other than protect the savers. He seemed quite angry considering it was all his fault.

[centurian]

It was a fascinating interview this morning with the dork who runs this busines.

Let's see - he destroys the business by overseeing high risk ventures and unbelievably stupid deals resulting in the business making catastrophic losses and basically being declared bankrupt......but it's the TREASURY'S fault that his business is going bust because they have refused to bail it out.

And this is the sort of cretin that we are told deserves their high salaries and bonuses because it "costs a lot to stop people of their calibre going somewhere else"??

I wouldn't be surprised to see another brick going through another window soon.....

Yeah, I can understand the Treasury's position. The money given to Lloyds, RBS etc. was largely to strengthen their balance sheet. This money should (in theory) be paid back.

The extra money given to RBS to cover their losses can be taken from future profits. The 20B loss is about 4 times their "normal" 5B profit per year, so a few years of profit will pay that back.

Note : None of the above means that taxpayer will get the money back, but as least the sums say it could.

But the Dunfermline required something like 80M - and only made a profit of 3-5M, so could never realistically pay it back.


While it still irritates me, bailing out an inherently profitable business with cashflow issues is different from throwing money at a unprofitable dog that needs to be put down.

[PM-Junkie]

It was a fascinating interview this morning with the dork who runs this busines.

Let's see - he destroys the business by overseeing high risk ventures and unbelievably stupid deals resulting in the business making catastrophic losses and basically being declared bankrupt......but it's the TREASURY'S fault that his business is going bust because they have refused to bail it out.

And this is the sort of cretin that we are told deserves their high salaries and bonuses because it "costs a lot to stop people of their calibre going somewhere else"??

I wouldn't be surprised to see another brick going through another window soon.....

[minestrone]

They used to have a few contract developer roles going.

[centurian]

It says the mortgages were bought from US banks : they might have been UK mortgages.

Though I dont understand what any building society is doing buying mortgages : dont they have any customers?

http://www.bbc.co.uk/blogs/thereport...line_deal.html

"It lost at least £9m investing in its own IT business"

So it was all our fault then...

[Cyberman]

It says the mortgages were bought from US banks : they might have been UK mortgages.

Though I dont understand what any building society is doing buying mortgages : dont they have any customers?

The reason they buy them is that it is all part of a merry-go round whereby banks and B/Ss can bypass their lending limits by keeping mortgages off-book. This was the crux of the current problems. They lent, sold on the mortgages and then could indulge in even more lending without being restricted by what they had already lent.

[BrilloPad]

So, yet another financial institution collapses because it bought SIVs from the US. How many more to follow, I wonder ? Ironically, the Rock never dabbled but was caught out by the total ineptitude of most other banks that did.

... and what was a B/S doing buying up dodgy US mortgages ? The authorities have a lot to answer for.

It says the mortgages were bought from US banks : they might have been UK mortgages.

Though I dont understand what any building society is doing buying mortgages : dont they have any customers?

[Cyberman]

So, yet another financial institution collapses because it bought SIVs from the US. How many more to follow, I wonder ? Ironically, the Rock never dabbled but was caught out by the total ineptitude of most other banks that did.

... and what was a B/S doing buying up dodgy US mortgages ? The authorities have a lot to answer for.

[Doggy Styles]

They should use the government's gilt-edged pension money.

[BrilloPad]

Well Merv did say that there's nothing left in the piggy bank...

If only that gilt auction had not failed last week!

[cojak]

Well Merv did say that there's nothing left in the piggy bank...

[BrilloPad]

http://news.bbc.co.uk/1/hi/scotland/7969882.stm

Scotland's largest building society is to be put on the market by the government after it effectively collapsed, BBC Scotland has learned.

It was hoped the Dunfermline could continue with a government bailout of between £60m to £100m.

However, the regulators have decided it is no longer viable, with a £26m loss expected to be announced next week.

The Scottish Government said it was "deeply disappointed" that it could not continue as a going concern.

The tri-partite regulators - the Bank of England, the Financial Services Authority (FSA) and the UK Government - have forced the sale of the Dunfermline, after it emerged a multi-million pound loss was expected and further problems were likely to emerge.

BBC Scotland business editor Douglas Fraser, who broke the story, said a key problem was the building society's exposure to risky assets.

He said it lost more than £9m in its own IT business and it bought mortgage securities from two troubled American finance houses, GMAC and a subsidiary of Lehman Brothers.

The building society is to be broken up in the same way as the Bradford and Bingley, which saw Spanish bank Santander taking over its savings accounts and branches, and the government having temporary control of its mortgages and loans.

It is expected that the UK Government will now turn its attention to protecting savers at the Dunfermline, and safeguarding jobs.

The building society employs nearly 500 people, half at its headquarters in Fife and half in the network of 34 branches.

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

"That offer remains on the table, but it does require Treasury approval," he said.

"We welcome the indications that social housing finance is also a priority of the Treasury, but are deeply disappointed that the Treasury now believe it is not possible to sustain the society as an independent institution, given the importance to Scotland of HQ jobs and functions.

"We hope that the Treasury has not closed its mind to the idea that both in terms of employment, and in terms of value for money for the public purse, maintaining Dunfermline Building Society as an independent and ongoing concern could well be the strongest option, and in the interests of its members and depositors."

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Amazed it cannot be saved. Times are bad at the treasury.