Stricken Dunfermline Building Society has been saved from collapse in a rescue deal with larger UK mutual Nationwide, the Bank of England announced today.
The Nationwide Building Society has bought core parts of the 140-year old institution, snapping up its retail and wholesale deposits, branches, head office and most of its residential mortgage book.
The deal, which follows a sale process led by the Bank over the weekend, will see around 530 of Dunfermline's staff transferred over to Nationwide.
The Bank of England stressed it was 'business as usual for all customers' and that all saver deposits were safe.
The Nationwide confirmed that the Dunfermline brand would remain intact after the deal. But the remaining parts of the building society not included in the takeover - including riskier assets and debt such as commercial loans and some residential mortgages - have been placed in administration.
The Bank of England said it used new powers under the Banking Act to rush the deal through, which would otherwise have seen Dunfermline - Scotland's largest building society - go bust.
However, the taxpayer has picked up a bill paid to Nationwide to cover liabilities not covered by the assets it is acquiring.
And the Bank has temporarily taken control of the building society's social housing loans customers and related deposits, which were not included in the deal.
