The Commonwealth Bank has stepped in to keep banking services running at Australia Post with a $110 million deal.
The bank has signed a five-year agreement worth $22 million a year to support the Bank@Post service that lets people do basic banking – including deposits and withdrawals – at more than 3,500 post offices nationwide.
About 1,500 communities – mainly in rural and regional areas – have no local bank branch.
Australia Post Group managing director Christina Holgate says the service currently runs at a “significant” loss from the cost of transaction fees and technology required to maintain the service.
It processed about $35 billion in customer transactions last year, Ms Holgate told AAP on Monday.
Top Australian Brokers
- eToro - market-leading social trading platform - Read our review
- IG - Extensive product array and user-friendly platforms - Read our review
- IC Markets - experienced and highly regulated - Read our review
- Avatrade - powerful trading tools - Read our review
CBA’s $22 million a-year contribution will allow the postal service to increase base transaction payments to post office licensees by about 50 per cent from January, along with a 25 per cent increase in their annual minimum payment for carrying the brand.
The other big three banks have been approached with the same deal, Ms Holgate says.
“We are hopeful the other three banks will support us, their CEOs have generously taken the time to listen to us,” she said, but added no agreements had been reached.
If all banks came onboard the business could reap about $500 million to invest in its postal network.
Ms Holgate admitted Australia Post has been struggling, blaming the continued fall in the number of letters sent despite a three-fold increase in packages as Australians increasingly embrace online shopping.
The volume of parcels delivered was up 11 per cent, and recorded a revenue of $3.5 billion.
Australia Post recorded a 41 per cent jump in full-year profit to $134 million in 2017/18.
