Tag: UK

Post Office Ltd, the Achilles’ heel of Royal Mail Group, could become the “EasyJet of banking” within a few years, according to Allan Leighton.

The chairman of Royal Mail said its subsidiary, which last half-year ran up losses of GBP95m before exceptionals, could one day return to profitability by providing cheap and simple banking services to millions.

“With 3m to 5m card accounts we could break even,” Mr Leighton said. “If you then add on banking services, we can make it very profitable and become the EasyJet of banking.”

The changeover to paying state benefits direct into bank accounts from next April could result in chaos because not enough has been done to train postmasters or educate benefit claimants, MPs were warned yesterday.

Post Office executives told the Commons Trade and Industry Select Committee that there was a muddle over which government department should take the lead and that preparations for the changeover were behind schedule.

The phasing out of giro books and the move to pay benefits through automatic credit transfer direct into bank accounts threatens to rob the Royal Mail of pounds 400m worth of business.

Plans to help to save the Post Office with the introduction of what had been known as the Universal Bank account have been scaled back, to the fury of sub-postmasters.
They told MPs yesterday that savers were now being discouraged from signing up to Post Office bank accounts, designed to provide basic banking services to people on low incomes.