Post Office helped by bank closures

The Post Office has notched up its second consecutive year of profits as it continues to benefit from bank branch closures.

Trading profits at the network more than doubled from £13 million to £35m in 2017-18, while turnover nudged up from £957m to £961m.

The performance was driven by its financial services, telecoms and insurance arms.

Its high street banking arm processed more than 125 million withdrawals from UK bank accounts in the period and customer cash deposits grew 28%. An influx of small business customers and individuals using the service while the likes of RBS and Lloyds shut hundreds of branches was behind the growth, the Post Office said.

Boss Paula Vennells added: “Millions of people and businesses rely on our services, especially as more and more banking customers are turning to our branches to undertake everyday banking services. We have made good progress in our transformation and there is more to do.

“We have set ourselves a target of £100m trading profit within the next three years. We need to be able to invest in the future and respond effectively to the challenges which remain.”

However, the Post Office’s retail arm had a difficult time, with mail, lottery, government services and payment services recording negative or flat growth. It blamed increasing competition in the letters market and a decline in stamp sales for the lacklustre performance in its mail division.

It also saw foreign exchange turnover decline by £3m as currency fluctuations resulted in lower volumes and fewer workers sending money home following “uncertainty over Brexit”.

Royal Mail completed more banking transactions last year.