Irish An Post left alone by the key players
AN POST looks to have got a poor response from Irish financial services’ providers in its quest to set up a new banking joint venture.
Market sources believe that AIB and GE Money are the only local groups who actually bid by the closing date of September 19 last.
If true, this means that Bank of Ireland and Ulster Bank chose not to bid and submit business and strategic plans.
Both are understood to have made it to the shortlist which An Post had drawn up, in conjunction with advisers McKinsey, in advance of the bidding.
Irish Life & Permanent had been surprisingly dropped from this list but there is no certainty that the company would, in any event, have entered the bidding.
It is not known how many institutions made it on to the shortlist.
AIB was always expected to put in a bid considering that its customers are currently able to do cash transactions at 1,000 post offices.
It is known that there was some interest from non-Irish banks, but market sources do not believe that the three most actively involved in this market – Rabobank, HBOS (Bank of Scotland Ireland) and Danske Bank (National Irish Bank) – showed any interest.
The preferred suitor – which sources believe has yet to be chosen – will be expected to put up an agreed amount of capital.
Bank of Ireland’s joint venture with the Post Office in Britain, which got off the ground some two years ago, involved a GBP125m up-front investment by the bank – GBP100m for operational purposes and GBP25m payment for the licence to use the Royal Mail and branch network.
Bank of Ireland’s UK experience has not been a success to date and breakeven has been deferred.
The rejection rate for its opening unsecured loan product was exceptionally high and prompted a change of focus for the joint venture from lending to savings.
Cyril Hardiman
