An Post picks Fortis as banking partner

AN POST has confirmed that Fortis will be its banking partner in a new venture to be launched next year

The Dutch bank has entered into exclusive negotiations with An Post about selling a range of financial products through the post office network.

Neither An Post nor Fortis would disclose how much they intend to invest in the venture or if financial services might become available from all post offices.

An Post said its future survival depends on being able to offer a wider range of products. The company faces the loss of its monopoly on delivering mail in the next few years, following an EU directive to open the postal sector to competition.

“We now have the opportunity to generate a substantial and strategically important new revenue stream, which is key to supporting our unrivalled network of urban and rural post offices,” said outgoing An Post chief executive Donal Curtin.

“This will secure and grow the future income of dedicated postmistress and postmaster contractors in post offices across Ireland.”

The choice of Fortis as its partner is somewhat of a surprise, as some brokers had been tipping AIB or GE Money as likely suitors.

An Post received more than 30 inquiries regarding possible partnerships from Irish and international banks.

Fortis said it was confident the proposed joint venture would increase the choice for Irish banking and insurance customers. The company has a similar venture running with the Belgian Post Office.

Fortis, one of the largest European banks, generated profits of more than €3 billion over the past year. It operates in 44 countries and has a market value of around €37bn.

Brokers believed that the link-up will increase pressure on profit margins in the banking sector.

“The move highlights the attractiveness of the Irish market to foreign banks and follows the entry of Danske Bank, HBOS and RaboBank into the Irish market. Further moves by Fortis over the medium term cannot be ruled out,” NCB Stockbrokers said yesterday.

It is not known this stage how the link-up with Fortis will affect the An Post’s existing agreement with AIB, which allows AIB customers to pay bills through the post office network.