BoI deal with UK Post Office extended
BANK OF Ireland’s joint venture deal with the UK Post Office, which has brought in £17 billion in savings to the bank through 11,500 post offices, has been extended by a further three years until 2023.
The bank is also purchasing the Post Office’s 50 per cent stake in the joint venture company, Midasgrange, which trades as Post Office Financial Services, for about £3 million in cash as the banks strengthens its relationship with the UK Post Office.
The new deal involves amendments to the Post Office’s commission rates on the bank’s products sold through the post offices.
The joint venture arrangement, which dates back to 2004, was one of the best performing parts of Bank of Ireland last year.
The arrangement has brought more than 2.8 million customers into the bank through the sale of savings products, mortgages, motor, home and life insurance, and credit cards.
The bank also provides foreign exchange throughout the UK post office network. The joint venture has a loan book of about £3 billion.
The Post Office relies on the Irish lender for its banking licence granted by the Financial Services Authority allowing it to take deposits through its network.
Bank of Ireland’s setting up of UK banking subsidiary, Bank of Ireland (UK) plc, regulated by the Financial Services Authority, in November 2010 has allowed the lender, which is 15 per cent State owned, to strengthen the relationship with the Post Office.
The number of deposits gathered by the bank through UK post offices increased by 44 per cent to £16 billion last year, though the bank said earlier this year that it did not expect the same level of growth in the business this year.