Bank of Ireland presence in the UK financial services market is to be ramped up following the British Post Office's decision to enter the current account market.
Bank of Ireland’s UK division has been the Post Office’s exclusive partner for the provision of financial products and services since 2004, but the announcement means its current accounts will be available to customers of 11,500 Post Office branches – a network of branches that is larger than that of all of the UK banks combined.
The Post Office will initially launch the current account product in a small number of branches before extending it to its full branch network in 2014.
Delighted
In a statement, Bank of Ireland said it was delighted to be working with the Post Office on the launch of its current account. Its financial services partnership with the Post Office has to date attracted 2.8 million customers, a savings book of more than £17 billion (€20 billion), a mortgage book of £3 billion and a network of 2,100 ATMs.
It has been one of the fastest-growing financial service providers in the UK in recent years, offering products such as home insurance, motor insurance, credit cards and life assurance as well as foreign exchange.
"This is very exciting news for the Post Office," said its director of financial services Nick Kennett in a statement. "We've carried out extensive research into the current account market and the findings tell us that customers want simplicity, transparency and good value for money."
Regulators
The Post Office is "undertaking a significant transformation" across its postal, government and financial services and the introduction of a current account product is "a further statement of this ambition", Mr Kennett added.
MPs and regulators are keen for competitors to enter a current account market that is dominated by Britain’s five biggest banks – Lloyds, Barclays, RBS, HSBC and Santander UK. Scandals such as the mis-selling of insurance products and the fixing of benchmark interest rates have eroded public confidence in the industry.
As of December 2012, Bank of Ireland had a total mortgage book of €28 billion in the UK, with a default rate on residential mortgages in that market of 2.3 per cent, compared to 13 per cent in the Republic.
