The Bank of Ireland said today it has signed definitive agreements with the UK’s Post Office Ltd to extend and enhance their retail banking partnership through to 2023.
The two companies have worked together since 2004, providing access to savings accounts, mortgages, insurance products and credit cards via post offices for the bank’s 2.8m customers in the UK.
The deal includes changes to the Post Office’s commission rates as well as the 11-year extension.
The new terms take effect in September 2012.
In a statement, the bank said the new agreements will see its partnership with Post Office Ltd becoming more of a direct contractual relationship, rather than the current joint venture set-up.
The Post Office will have its share of the two companies’ existing joint venture company, Midasgrange Limited, purchased by the Bank’s UK subsidiary for about GBP 3m in cash.
Meanwhile, the Post Office will continue to lead on product sales and marketing while the Bank of Ireland takes responsibility for developing and delivering the financial products, the Bank said.
“The Bank’s broader relationship with the Post Office which also includes a large fleet of ATMs and our successful joint venture, that provides retail foreign exchange services throughout the Post Office network, will be further enhanced by today’s announcement,” said the Bank.
“Capitalise on the opportunity”
Responding to confirmation that the Post Office has extended its contract with the Bank of Ireland (BOI) to provide financial services products for an additional three years to 2023, the Communication Workers Union says that Post Office banking needs to work for consumers.
Britain’s major postal union, the Communication Workers Union, said today that it hoped to see the partnership between the Bank and Post Office Ltd lead to a broader range of products and more revenues for the post office network.
Billy Hayes, the CWU general secretary, said the Post Office had one of the most trusted brands in the UK with its “unrivalled” network of 11,500 outlets throughout the UK.
“Today’s decision to extend the relationship with the Bank of Ireland will solidify the Post Office’s place as a provider of financial services for consumers in all communities,” said Hayes.
“The Post Office and the Bank of Ireland should capitalise on this opportunity and make good on past promises to deliver current accounts, child accounts and full business banking services. The success of the current product range shows there is demand for financial services through the Post Office but what people really want is personal and business banking available locally from a trusted source.”
The union boss added his hopes that the Bank of Ireland deal would secure “vital funds” for the Post Office as it faces an “uncertain future under controversial business plans and government mutualisation plans”.
Post Office Ltd officially separated from the Royal Mail Group this April, although the company currently remains government-owned. Ministers are drawing up plans to potentially turn it into a mutualised organization – owned by its employees and major stakeholders.
Source: Post&Parcel/Bank of Ireland/CWU