Irish An Post names preferred joint-venture partner
AN POST has submitted the name of a preferred partner for its planned financial services joint-venture to the department of communications. It hopes to have approval and sign-off for the new business before Donal Curtin, the chief executive, leaves the company this July.
GE Money, the giant US services group, is regarded by industry insiders as the lead candidate for the venture. But the identity of the preferred partner is being closely guarded.
A total of four banks submitted proposals for the joint venture late last year. It is understood that Allied Irish Banks was also on the shortlist. A spokesperson for An Post said the company would not comment on the process as it was still going on. It is believed, however, that departmental approval will trigger talks on the finalisation of a deal.
An Post announced last year it had hired McKinsey to advise on the development of a financial services arm. While the consultants received a total of 28 expressions of interest from both Irish and international banks, they attracted just four concrete proposals.
It is believed McKinsey forwarded the name of the preferred bidder to An Post in December.
The proposal, which has been closely associated with Curtin’s tenure, will result in An Post offering savings and insurance products.
Curtin says the sale of financial products will be crucial to the commercial survival of the post office network. The government has repeatedly warned that An Post could face the loss of its social welfare contract.
Bank of Ireland has entered a joint venture with the Post Office in Britain, but has already pushed backed its target date for break even. Bank of Ireland was not one of the four parties to submit proposals for a joint venture with An Post.
The British government recently announced that it would not renew a Pounds 1 billion social welfare contract with the Post Office.
Curtin last week indicated he would not be seeking a renewal of his existing three-year contract, but the post office is committed to complete the financial services joint venture. An Post already sells a range of financial services products through its One Direct subsidiary.
