The Nationwide, which rescued the 144-year-old institution following its collapse in 2009 during the financial crisis, said it would re-deploy staff where possible but could not rule out compulsory job losses.
However, it will retain the Dunfermline’s former headquarters at Caledonia House as a customer call centre, increasing the number of staff based there from 250 to 300. Around 200 are employed at 32 Dunfermline branches across Scotland.
The Nationwide, the UK’s largest building society with 15 million customers, said it wanted to offer Dunfermline account holders the full level of banking service which it has developed in recent years thanks to £1 billion of investment. Along with the Dunfermline, it is also integrating the Cheshire and Derbyshire building societies into its main brand.
Tony Prestedge, chief operating officer of the Nationwide, said: “Having made considerable improvements to our range of products and services, the only way we can ensure all our members benefit is to take this logical step to integrate our businesses under one unified, strong, and nationally recognisable brand. The strength of the Nationwide brand is increasingly compelling and we will now be able to offer customers of the Dunfermline a vastly improved proposition.
“As well as benefiting from access to our full suite of products and market-leading customer service, more people will have access to our strong branch network with around 15 per cent more customers of our regional brands being within five miles of a Nationwide branch than at present.”
He added that the integration will result in “significant efficiencies” for the business, ensuring that Nationwide is better placed to cement its position as a real alternative to the high street banks.
There are currently 40 Nationwide branches north of the Border. Prestedge said that, while each case of duplication in a town would be looked at individually, Nationwide branches tended to be better equipped and in more prominent locations, and so were more likely to be retained.
Together, the Dunfermline, Cheshire and Derbyshire have 91 branches, of which about half will be re-branded and half closed.
Integration of the Dunfermline branches will begin in Spring 2014.
Dunfermline Building Society was established in 1869 as a mutual organisation and long prided itself on a prudent approach.
It established branch and agency offices throughout the country and growth led to the absorption of smaller societies such as the Stenhousemuir, Peebles, Fourth Fifeshire Investment Co and the Stirlingshire.
But a reckless move into commercial property loans and buy-to-let mortgages in the early years of this century led to its collapse into administration.
• Scottish Building Society chief executive Gerry Kay stepped down yesterday, saying that he wished to pursue other interests after five years at the helm.
He will be succeeded by chief operating officer Mark Thomson, who joined last year as part of a succession plan.