Posten Norge to be freed from nationwide banking duty

Posten Norge is set to step up the restructuring of its post office network, accelerating the transfer of services to partner-run postal counters. It revealed last week that the Norwegian government is planning to repeal its legal obligations to provide banking services at its postal offices.

Next year’s State Budget is set to cut the government funding available for subsidising unprofitable postal and banking services, but it also seeks to remove the postal banking duty within Posten Norge’s operating licence.

Posten Norge is currently legally required to provide basic banking services, including deposits and withdrawals, at all 179 of its post offices and 1,250 in-store postal counters.

The number of postal banking transactions has fallen 90% since 1990, but with large fixed costs, postal banking services have been eating into Posten Norge’s profitability.

Costs for providing the services were around NOK116m last year, with forecasts for an increase to NOK 179m next year. So far, these costs have been compensated by government funding, though the budget proposals would pull the plug on the funding.

“Easier”

Dag Mejdell, the Posten Norge chief executive, said he was pleased the government were including the repeal in with the next State Budget, following requests to do so by his company.

“The end of the banking requirement means we will accelerate the preparations to transfer more post offices to in-store counters,” he said.

“We believe there is a basis to reduce the number of post offices by more than 100. At the same time, we will expand to use more in-store facilities, and we want to introduce a new and easier shop concept with more of a focus on packet delivery.”

Posten Norge said it would continue to provide retail services for the online bank DnB NOR, in accordance with the current agreement with that bank, within its entire postal network after 2012.

Mejdell said: “The Post is open to providing banking services within the post office network after 2012, either for DnB NOR or other banks – but based on satisfactory profitability, and without a requirement to offer the service nationwide.”

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