Post Office ponders insurance sale as telecoms goes on the market

THE Post Office has put its telecoms arm up for sale, while mulling over plans to also offload its insurance business.

The state-owned company has hired investment bank PJT Partners and is hoping to raise more than £100m by selling its phone and broadband division. Boutique peer Fenchurch Advisory Partners has been picked to conduct a strategic review of the Post Office’s insurance arm, Sky News reported.

The plans come little more than a year after the appointment of Nick Read, the former boss of convenience store Nisa, as Post Office chief executive. Mr Read was said to have ordered the potential disposals after conducting a major review of operations shortly after his appointment last July. The Post Office has been embroiled in a crisis that led to a number of its branch managers being wrongly sent to prison following allegations of false accounting and theft.

The company, which remains on the Exchequer’s balance sheet after Royal Mail was privatised in 2013, agreed to pay £58m in compensation last December to more than 550 postmasters implicated. The managers brought legal action against the company over shortcomings associated with the Horizon IT system that was introduced between 1999 and 2000. The Post Office has expanded its services since splitting from Royal Mail. Beyond insurance, broadband and phone services it also offers savings and loans.

It has been hit hard by the pandemic, with more than 90pc of its branches needing to remain open to ensure hardship payments are made. The Postal Services Act 2011, which laid the groundwork for Royal Mail’s sale and float, came alongside a 10-year agreement to handle the postal monopoly’s letters and parcels.

This week, Royal Mail signalled that Saturday letter deliveries could be scrapped as it focuses on booming parcel demand that has been turbocharged by the pandemic.

The Post Office declined to comment.