Post Office plans to offer mortgages
The Post Office is preparing to offer customers mortgages in direct competition to banks and building societies.
David Mills, appointed in February to turn round the organisation’s fortunes, believes this is the key.
Under the scheme, the Post Office, which is losing (pounds) 163m a year, would offer a full range of financial services, including mortgages, through its 17,500 outlets.
Mr Mills said the best way for the public to safeguard their local post office was to use it as often as they could for as many transactions as possible.
The chief executive believes offering financial services could make the organisation profitable again, and secure the future of Scotland’s 1200 rural sub-post offices.
According to some estimates, up to 100 post offices could be threatened otherwise, although hopes are high that a government social network payment of (pounds) 150m for three years will be agreed soon.
This would allow the offices to continue for the next few years despite the introduction
of direct electronic payment of benefits next year.
Mr Mills, who was in Inverness yesterday for a Postcom/Postwatch conference, was confident that financial services provided a more permanent solution.
The Department of Trade and Industry recruited Mr Mills from the HSBC bank where he had established a reputation as a highly successful general manager of personal banking. He believes this is the right time for the PO to get into that area.
“We couldn’t buy our reputation. People trust us. If they don’t understand official documents, they take them along to us,” he said.
“Some even get us to check their wills. We are classless and blind. If you are male with three earrings, two of them through your nose, and you go into a normal bank, I think there is less of a chance you are going to get what you want. But in the PO it does not matter if you are dressed in a bow tie or skating shorts.
“We already provide some financial services. We do travel insurance. We do household insurance. We do national savings. We are looking at extending these services into other areas, but the important thing is they would be Post Office brand products.”
“I think we have a lot of advantages. There are very few banks in the world that have as big a network. If you added the four major clearing banks and the six major building societies, they have 12,500 branches compared to our 17,500.”
