Wind-down costs see Postbank record loss of €73.4 million

POSTBANK, THE financial institution being wound down by its joint owners – An Post and BGL BNP Paribas – made a loss of €73.4 million in the 18 months to the end of June 2010.

This comprised a trading loss of €26.6 million and a financial charge of €46.7 million relating to the closure of the bank, which was announced in February.

The wind-down costs include €3 million in redundancy payments for 140 staff who were laid off.

Latest accounts for the bank, which were lodged recently with the Companies Office here, show that it had retained losses of €118.2 million at the end of June.

The bank recorded a loss of €21.1 million in 2008, the previous comparable reporting period provided in the financial statements.

A spokesman for An Post said the full costs of the wind-down process have been accounted for in the latest accounts.

All of its customer accounts have been closed and the bank will cease operation by the year end, he added. Surplus capital of €6.8 million is expected to be returned to the two shareholders.

Set up in April 2007, Postbank never made a profit.

But its latest accounts indicate that revenues were building. Operating income rose to €28.9 million in the 18 months to the end of June from €16.6 million in 2008.

Most of this related to insurance intermediary commissions and mobile phone top-up fees.

Postbank’s customer deposits amounted to €267.4 million at the end of June compared with €301.5 million at the close of 2008.

This would reflect the fact that the business was in wind-down mode earlier this year with customers closing accounts.

Its 264 staff were paid €17.1 million in wages and salaries – an average of just under €65,000.

For the two years to the end of December 2010, Postbank calculates that its two executive directors – chief executive Margaret Sweeney and former finance chief Enda Devine – would earn just under €1.3 million between them.

The accounts also detail the sale of two units to An Post – PostPoint and an insurance businesses – for €14 million as part of the winddown of the operation. These units had a carrying value of €41.7 million at the start of 2009, the accounts show.

Postbank was set up a joint venture between An Post and Benelux group Fortis, which invested €56 million in cash. Fortis was later sold to BNP Paribas.

Postbank offered current accounts, and savings and investment products, which were available through 980 post offices.