Scotland's Biggest Building Society Sorted!

With the eventual news of Dunfermlines plight today I can't help thinking what a shame it is that Scotlands biggest building society could not survive on a standalone basis.
However in keeping with the history of the mutual sector looking after its own, it is great to know that the member business, branches and staff are all being taken on by Nationwide.

The press releases from the Bank of England and Nationwide allude to the issues centering around purchased commercial mortgage assets; but as we will almost certainly not see the awaited report and accounts now, we will not be able to get to the bottom of things. Whatever the issues were that caused the speculated losses and long term capital erosion it is likely that the risks were not fully understood at the point of aquisition.

All businesses take risk, this is what generates return, but our motto at Saffron is do not take risks you don't understand. If a business wonders about its skill set in relation to a particular risk, the chances are you don't have the skills.

I had lunch today with a journalist from a well known pink broadsheet and he was a little disapointed that the Dunfermline story was not really much of a story. The savings are safe, the brand and branches will remain, in fact from the members perspective it is business as usual. Good news for Dunfermline members and the good news for Saffron members is that we don't do commercial!