The Dunfermline Building Society, its 530 staff, 300,000 customers, branches, and call centres has been taken over by the UK's biggest building society the Nationwide today.
The Dunfermline is the latest in a recent line of Scottish financial institutions to have succumbed to the credit crunch. In September last year, Edinburgh-based HBOS was merged with Lloyds in an emergency move and the Royal Bank of Scotland, also with head-quarters in Edinburgh, had to be bailed out by British taxpayers in October and again in February.
The Dunfermline, founded in the nearby town of Dunfermline in Fife, in 1869, was recently hit hard by commercial property loans and a large loss in an IT subsidiary.
Scottish First Minister Alex Salmond criticised the government for not stepping in to support the Dunfermline as an independent organisation:
"We...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," said Salmond.
However, Chancellor Alistair Darling told the BBC that the Dunfermline would need between £60 and £100 million to continue as an independent institution and therefore a bailout was not a viable option.
"It couldn’t even service
that sort of loan, let alone repay it," Darling told the BBC.
There is expected to be minimal disruption for Dunfermline customers, who should be able to continue using branches and other channels for their banking needs as usual.