In September 2003 I was surprised to be invited to the ancient burgh of Dunfermline to interview Peter Weanie, who had been hired the previous year from Clydesdale Bank to become head of commercial lending at Dunfermline Building Society.
At the time I remember being a little surprised that a traditional building society should want to get into one of the most competitive areas of the UK’s corporate banking market.
Surely. I thought, aggressive lending by players including HBOS and Anglo Irish Bank would mean that, if anything, the Dunfermline would end up with the dodgiest loan book in the sector? I thought the society would be taking on a vast amount of risk for relatively small reward.
Well this is what I wrote at the time in an published in the Sunday Herald on 14 September 2003.
Commercial lending was a new departure for the building society on Peter Weanie’s arrival in January 2002. He soon brought in Crawford McCaughie, formerly of Bank of Scotland asset finance, as head of lending. “It’s very important to get a strong individual — who is able to say no to me or anyone in the team — in charge of credit control,” says Weanie …
But one senior corporate banking executive warns that there may be pitfalls in bringing in an asset-finance specialist to run the building society’s corporate and commercial lending arm. “It does not always make sense to transfer someone from asset finance into corporate and commercial lending as, by its very nature, asset finance is always secured,” he says.
Well the move into commercial property did turn out to be disastrous for Dunfermline Building which was yesterday the subject of a rescue takeover from Swindon headquartered-Nationwide Building Society, with HM Treasury taking on a reported £750 million of its toxic loans. The deal had parallels with the way Bradford & Bingley was salvaged last October.
This blog post was published on 30 March 2009