By Graeme Bletcher

SPECULATION OVER the future of Dunfermline Building Society continued yesterday, sparking redundancy fears for its Fife headquarters, where 50 jobs were shed just six months ago.

The UK Government is believed to be planning a £60 million rescue package in the light of rumours of a loss of £26 million to be announced in the next few weeks, compared with a £2m profit in 2007.

Just four months ago, a members’ evening was held in Largs to answer questions on savings and discuss work within the community.

At the time chief operating officer Jim Willens said, “The night provided us the opportunity to reassure our members that we are financially robust, well capitalised and that we have strong liquidity levels.”

A number of local politicians and councillors have voiced concerns at how quickly the situation has deteriorated and ministers at Holyrood and Westminster have been urged to work together to address the issue.

Labour’s Dunfermline East MSP Helen Eadie told BBC Radio Scotland yesterday, “The cost of not doing anything is something that is immeasurable.”

West Fife Councillor William Walker played down the risk to individuals’ savings, but is concerned about the mutual losing its identity.

He said, “There is no question that the deposits of savers in Dunfermline Building Society are secure but it is essential that the society stays independent for the sake of local jobs and the future of the Scottish economy.

“The society has a proud history as a long-term mutual building society, owned by its depositors, whose only crime has been to get caught up in the financial excesses of other converted societies and banks who offered ridiculous home and other loans and indulged in dubious debt trading trading practices.”

He added, “Although small by international standards, DBS is Scotland’s biggest building society.

Already a takeover by another larger society or bank is being talked of. This must not be allowed to happen as it would lead to even more job losses beyond those already announced and lead to yet another financial institution losing its HQ in Scotland.”

Established in 1869, the DBS is the largest Scottish building society and in the top 14 in the UK. Its head office Caledonia House in Dunfermline was built on the south side of the town in 1994.

The society has 34 branches in the UK and almost 500 employees. At the end of 2007 total assets increased by 20% to £3.3 billion and over the last five years nearly £70 million of mutuality benefits have been passed on to members.

The current losses are thought to be from bad loans in the commercial property market and a trend towards buy-to-let loans.

Joe Rosiejak who chairs the Dunfermline area committee said, “I think it is of paramount importance that the situation is resolved and that the Scottish and UK Governments get round the table to find an appropriate solution.

“Dunfermline Building Society is one of the oldest businesses in Scotland and despite the world recession we must ensure its survival.”

The society have a commitment to invest £800 million in affordable housing over the next three years, which may now be in jeopardy. The board is understood to be in talks with the financial regulator.

Alan Russell, who chairs Fife Chamber of Commerce, said, “It is difficult to comment at this stage, but if indeed the DBS are in difficulty then there have been assurances given by the Scottish and UK government that help is at hand.

“If it is the case, then Fife Chamber will look to ensure support is received, but as yet we are not sure if it will be needed.”

A DBS saver, who asked not to be named, said, “I always thought the Dunfermline was a rock in the financial sector so I am concerned at this speculation.

“I am perturbed that the building society is not making any announcements on the rumours, which would perhaps allay the fears of hundreds of customers like me who have saved with the society for many years.”