@ Stuart 22 "It all started to go pear shaped when Thatcher made Building Societies game for asset snatchers."
The implosion Thatcher caused culminated in the raft of demutualisations in the late 1990s (Halifax+Leeds Permanent, Woolwich, B+B, A+L et al). After Abbey National converted first in the late 1980s it all went relatively quiet until 1994-ish.
My take on Britannia is a little different as this didn't happen until 2009-ish. They were fucked by bad lending and knew it. They realised they had to sell out to some sucker so they could scarper before the shit hit the fan. Step forward Co-Op bank which had the same empire building zest as their owners at Co-Op Group (the ones who paid £1.6bn for Somerfield and have spent the last few years reversing it!). Britannia were savvy though and even lobbied for a self serving change in the law so that a mutual Building Society could merge with a Provident Society like the Co-Op Bank.
I was a Britannia member but don't flame as the black hole wasn't my fault - that was down to Platform their sub-prime mortgage specialist lending unit. The corpse was so rotten the members got ziltch from the shadow conversion of Britannia - all we got was a £1 membership of the Co-Op group, with the £1 paid out of Britannia reserves just before it all completed. That's how much the whole BBS business was worth - £1 per member. Co-Op members got shafted worst in the long run though. That shows they must have known there was something stinky about Britannia. I do wonder what would have happened to BBS had they not been acquired; probably some kind of bankruptcy and rescue as happened to Dunfermline with Nationwide.
So I think the question is not whether Due Diligence was done or not, but whether the warnings were heeded. The answer to that is clearly, La la la we're not listening "No". I don't think the Co-Op were conned as such - they wanted BBS to increase the size of their empire regardless of the eventual cost. It was that same empire building that eventually caught them out - their attempt to acquire the branches that became TSB from LBG. The external regulator due diligence to make sure they were strong enough for the deal to go through is when the problems were spotted.
As far as I'm aware the BBS team at the time have escaped any sanction for the part they played. I suspect the situation is the same on the Co-Op side of things apart from Flowers who went to jail for Meth and Crystal rent boys.