Post Office Limited has signed definitive agreements with Bank of Ireland (BOI) extending itslong-term partnership for provision of retail banking services until 2023.
Launched in 2004, the partnership was due to expire in 2020. Under the contract extension, thecooperation will transform into a direct Bank / Post Office model with Post Office primarilyresponsible for product sales and marketing and Bank of Ireland being in charge of productdevelopment and delivery.
As a result of the transition, the bank’s UK subsidiary will purchase the Post Office’sshareholding in Midasgrange Limited, the current joint venture company of the two parties, foraround £3 million. These new arrangements are expected to come into effect in September 2012.
Post Office Limited said: “In order to further build on this success and transform the PostOffice into a key provider of straightforward, value for money financial products and servicesacross the UK, Post Office Limited is pleased to announce a three-year extension to itsrelationship with Bank of Ireland until 2023. Together, both parties are committed to investing inthe capability and capacity of their financial services operation to deliver the next phase ofbusiness growth and long-term value for both organisations, as well as bringing benefits to ourcustomers.”
The state-owned postal services provider said the move would also simplify and improveprocesses, strengthen accountability and enable further investment “to allow greater flexibility ina relationship that will deliver comprehensive retail financial services that continue to winawards and accolades for its transparency, competitiveness and functionality”.
Responding to the contract extension, UK postal union CWU stressed that Post Office bankingneeded to work for consumers, with a broader product range including current accounts, childaccounts and full business banking services. It also expects more revenue to be secured for thePost Office through this contract extension.
Billy Hayes, CWU general secretary, said: “The Post Office is one of the most trusted brands inthe UK and has an unrivalled network of 11,500 outlets across the country. The decision to extendthe relationship with the Bank of Ireland will solidify the Post Office’s place as a provider offinancial services for consumers in all communities.
“The success of the current product range shows there is demand for financial services throughthe Post Office but what people really want is personal and business banking available locally froma trusted source,” he added.
BOI stated: “The relationship with the Post Office, which underpins our UK strategy, provides UKconsumers with a broad range of Post Office branded products including savings accounts, mortgages,motor, home and life insurance and credit cards and has over 2.8 million customers. The Bank’sbroader relationship with the Post Office which also includes a large fleet of ATMs and oursuccessful joint venture, that provides retail foreign exchange services throughout the Post Officenetwork, will be further enhanced by the announcement.”
