Why is Nationwide acquiring Dunfermline Building Society?

Nationwide believes it is the right thing to do for both Dunfermline and Nationwide members. Dunfermline members can be assured their savings are safe and the deposits and mortgages we are acquiring will further strengthen Nationwide's position as the world's largest building society.

Having considered everything carefully we are confident that this transaction will enhance the benefit to all members in the long term as well as preserving an historic and strong franchise, allowing the Dunfermline Building Society name to continue.

Which parts of the Dunfermline is Nationwide acquiring?

Nationwide has acquired all of Dunfermline's savings accounts, branches, head office and the majority of its residential mortgage book (other than social housing loans and related deposits).

Dunfermline Building Society's social housing portfolio will be transferred temporarily to a 'bridge bank' owned and controlled by the Bank of England.

The remainder of the business, including acquired mortgages and the commercial loan business has been placed into a Building Society Special Administration Process.

Who will run the Dunfermline?

The combined Society will be run by the current Nationwide Board, led by chief executive, Graham Beale, and chairman, Geoffrey Howe. Dunfermline will sit alongside the Derbyshire and Cheshire building societies as part of Nationwide's regional franchises and will report through to group development director, Tony Prestedge.

How is my money protected?

Nationwide Building Society is authorised by the FSA and is a member of the Financial Services Compensation Scheme. Savings remain covered to a maximum of £50,000 per individual by the FSCS and £100,000 in the case of joint accounts. When building societies merge the FSA currently allows separate compensation limits to be retained providing the accounts were opened prior to the merger date. This means that individual customers with accounts opened before 30 March 2009 in Nationwide and in Dunfermline will benefit from full cover for up to £50,000 invested in each society (£100,000 for joint accounts). The FSA is reviewing this temporary rule and hopes to have a permanent solution in place at the end of September 2009. Customers of Derbyshire or Cheshire Building Society with accounts opened before their respective merger dates with Nationwide (1 December 2008 and 15 December 2008) and who also have a Dunfermline account will retain separate compensation limits of up to £50,000 on each individual account (£100,000 for joint accounts).

Why will there be no vote by membership of either society and why will there be no pay out to either set of members?

The transaction will take place under the so-called "special resolution regime" contained in the recently introduced Banking Act 2009. This legislation grants the UK Tripartite authorities - the Treasury, the Bank of England and the FSA - special powers to deal with financial institutions that are in difficulties, including making statutory instruments to transfer some or all of the business of the institution in financial difficulty to a third party. The terms of the transfer were negotiated between the Nationwide Board, Bank of England and the Treasury.

Can you tell me more about Dunfermline?

You can find out more information by accessing Dunfermline's website - http://www.dunfermline.com.