Postbank joint venture lost €25m last year

POSTBANK, THE joint venture between An Post and Belgian financial services group Fortis, lost €25 million last year, according to the post office group's annual report.

The 50-50 banking venture contributed €8.4 million in turnover to An Post in 2007 but resulted in the postal group booking a loss of €12.5 million in relation to its half share in the business.

Postbank was set up in April 2007 and opened for business the following month.

An Post's annual report shows that it incurred costs of €4.9 million in establishing the joint venture.

It also folded its Postpoint and and An Post Direct businesses into the venture, which had a carrying value of €10 million.

Fortis, meanwhile, invested €56 million in cash to the project.

An Post chief executive Donal Connell said Postbank's financial performance last year was "in line with what we had budgeted".

"It's very much a business in investment mode," he said. "We would see that loss reducing in 2008."

To date, Postbank has concentrated on savings products, netting more than 10,000 customers.

Mr Connell said it would launch is current account product - to be called the Everyday Account - in the next few weeks.

"We expect to have tens of thousands of customers ," he said.

This will offer credit cards and a range of loans but Postbank will not be entering the mortgage market.

"We'll be looking at that during the course of the year to see if it makes sense."