Dunfermline culls HQ staff 'but will not become prey'

DUNFERMLINE Building Society is to cut almost a fifth of its head-office workforce in an effort to cut costs – but has pledged to remain independent amid consolidation in the industry.

The Fife-based mutual yesterday said it was to shed about 50 jobs at its headquarters in Dunfermline – which currently has about 290 employees.

News of the job losses came as Dunfermline announced that it has appointed two senior executives to its board – including a former director of industry leader Nationwide.

Jim Willens, former group services director of Nationwide, has been named as the new chief operating officer at the society.

Graeme Hardie, a former executive director of retail banking at Abbey and former managing director of NatWest retail banking, has been appointed as a non-executive director as part of a boardroom shake-up.

The moves came just days after industry minnows the Cheshire and the Derbyshire merged with Nationwide amid fears over their financial future.

Dunfermline yesterday insisted it would remain independent and pointed to its strong levels of liquidity as evidence of its financial stability.

It added that it may consider making acquisitions of its own.

The 50 job losses are initially to come through natural wastage, voluntary redundancy and early retirement, but Dunfermline said it could not rule out compulsory redundancies in the future. The building society refused to say whether the cuts would include a cull of senior executives. A spokesman said yesterday: "Unfortunately, there may also need to be a small number of compulsory redundancies at head office. None of these measures affects our branch network and we remain totally committed to improving customer service in every part of our business."

In March, Dunfermline announced it had made a profit after tax of 2 million in 2007, down from 5m the previous year after taking a one-off 9.5m hit from problems developing a new mortgage-processing system.

The firm warned yesterday that current economic conditions were "very challenging" and said it had been forced to find ways of cutting its costs.

The building society described yesterday's appointments as a "major coup", saying the standard of the new faces joining the mutual was "testimony" to the level of the society's ambitions.

Chief executive Graeme Dalziel said: "The senior management team and the board are looking forward to working closely with Jim to further develop and grow the business."

He added: "The changes we have made will ensure our business continues to be strong and competitive in the future for our members and staff.

"Dunfermline Building Society is financially robust and well capitalised, and has strong liquidity levels. We are fully committed to remaining an independent mutual building society."

Ray Boulger at mortgage broker John Charcol said: "There is no doubt there will be more consolidation in the sector. However, if you see the sector as a food chain, the middle size institutions may still be able to make acquisitions.

"Dunfermline seems confident that it will remain independent and could even look to make acquisitions."

The shake-up will also see Peter Craigie, currently operations director at Dunfermline, move to a new board position as commercial director.

Willens will be responsible for the overall development of the society's services to its members, through the branches, Dunfermline Direct, and online.

The society added that two members of the executive team were stepping down. Brian Morton is leaving his position as sales and marketing director, while Alan Mitchell, general manager (people), has decided to take early retirement.