An Post plans to start selling residential mortgages next summer 

An Post plans to add mortgages to its growing list of financial products next year. It said the shrinking banking market offers an opportunity to extend its financial services reach. Picture: Denis Minihane

An Post is planning to enter the residential mortgage market by the middle of next year.

The State-owned postal operator said it is in “advanced” discussions with a potential partner which would act as underwriter. The homeloans would be sold under the An Post brand, both online and through the company’s nationwide network of 940 post offices.

An Post had originally planned to start providing mortgages last year, as part of its growing financial services offering, and has held talks with five prospective mortgage partners over the past two-and-a-half years.

Speaking on the back of the company’s annual results, An Post chief executive David McRedmond said with Ulster Bank and KBC Bank Ireland signalling their withdrawal from the Republic, there is “no better opportunity” for An Post to extend its foothold in the financial services market.

An Post’s head of retail Debbie Byrne said the partnership model will remain in place, with An Post not having a banking licence. She said it will continue to look to grow its financial services product line and has “big ambitions” to start lending to SMEs also. 

Ms Byrne said An Post Money is becoming established as a challenger in the retail banking space.

An Post took a €50m hit from Covid restrictions last year due to rising health and safety costs, and a huge decline in both mail volume and foreign exchange activity. The company slumped to a €10m loss last year, which ballooned to €32m due to one-off exceptional items.

However, revenue increased 3% to €916m and An Post said it has seen a strong start to this year, with an operating profit in the first quarter and an 11% year-on-year jump in revenue. It expects to return to pre-pandemic profit levels this year.

A surge in online shopping during lockdown saw An Post’s parcel delivery business grow by 100%, although there has been a 20% drop-off since retail reopened. While letters remain An Post’s biggest revenue stream, parcel deliveries now account for 25% of sales. The company anticipates 15% annual growth in parcel revenues in each of the next two years.

Mr McRedmond said the future of the physical post office network is brighter than for some time and can prosper on the back of a recovery in existing services, an increase in financial services products and post offices acting as collection points for out-of-home e-commerce deliveries.