CBA’s funding is in the post

THE Commonwealth Bank has stepped in to keep banking services running at Australia Post with a $110 million deal.

The bank has signed a fiveyear 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 3500 post offices nationwide.

About 1500 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 said yesterday.

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 rise in their annual minimum payment.

The other big three banks have been approached with the same deal, Ms Holgate says.

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 threefold increase in packages as Australians increasingly embrace online shopping.