The collapsed Dunfermline Building Society was forced to write off a massive £9.5 million of its £11 million profit in 2007 on a failed technology subsidiary.
Yesterday the healthy parts of the failed building society were sold to the Nationwide, with the government taking on its toxic assets.
Scotland secretary Jim Murphy has accused the firm's management of "really bad decisions on their technology".
The company poured £31 million into the loss making Dunfermline Solutions unit, which was set up to develop a mortgage IT system that could then be sold to other financial institutions.
In its annual report for 2007, the firm reported a £9.5 million write-down "mainly in the area of mortgage processing where our requirements and the market overall in this area is changing".
According to The Herald newspaper, Dunfermline Solutions' statutory accounts, published five months ago, show it wrote down £6.9 million but says the unit is committed to completing development of the IT systems and would be backed by resources from the building society.
The unit made a £5 million loss and was left with assets of £20.7 million and a deficit of £10.7 million, after receiving £31.4m from the building society.
The subsidiary began developing the mortgage system several years ago in partnership with Temenos, based on the Swiss vendor's Globus technology.
In a case study produced for Temenos, Stewart Cooper, director of operations for Dunfermline described the implementation as a "rollercoaster ride". The Temenos product had never before been used in the UK building society sector and the company identified 100 gaps in functionality that needed to be developed alongside the implementation.
"Was this a risky decision?" he asked. "We accepted that the selection of any software partner incurs risks. Additionally, we were concerned about the lack of local market knowledge and potential implementation risks, combined with the prospect of being the only UK customer in this market."
The project entailed the complete replacement of all systems, including tellers and general ledger. In the case study - which is no longer available from the Temenos Website - Cooper concluded: "We have a major project that covers system and organisational change and a 'new' company! At times this has been a rollercoaster ride, but we identified the risks and we managed them and I don't regret it in any way."