State history goes in sale of Postßank

Press, 1 March 1989, Page 37

State history goes in sale of Postßank

By

MARTIN FREETH,

, of NZPA

Wellington Postßank passed out of public ownership yesterday, 122 years after its establishment as a State institution to encourage small savings. ANZ Banking Group completed its takeover of Postbank with payment of a $665.4 million cheque to State-Owned Enterprises Minister, Mr Stan Rodger. With Postßank, the Melbourne-based bank is acquiring a huge retail customer base and a business that has surged into profitability under impact of an internal shake-up. Since corporatisation on April 1, 1987, Postßank has more than halved its outlets to 529 by December, cut staff to 3500, and put in place competitive management and computer systems. Losses predicted gave way to profits achieved when the bank reported 1987-88 net earnings of $32.8M. The interim profit for this financial year was S3IM. ANZ has predicted Postßank would produce satisfactory results for it immediately, with no detriment to the Australian’s over-all return on equity.

The takeover will increase ANZ’s share of the New Zealand financial market from 10 per cent to 16 per cent, and more than double its personal deposits, the ANZ says. Postßank’s strength is its vast retail base, said to include more accounts than the population of New Zealand. Last September deposits were $1.2 billion out of total assets of $3.78. That base reflects the bank’s origins in a colonial New Zealand where the Government sought to encourage workers to save as a means of ensuring social stability. The Post Office was seen as a good vehicle for extending saving facilities, the first of which opened in early 1867. The bank was designed for the small saver •and higher interest was paid on smaller accounts. When the POSB was split off as Postßank from the other two businesses of the Post Office in 1987, it had already started improving services and internal systems, and making interest rates more competitive. Customers can expect no change in the bank, for a while anyway. ANZ has given assurances Postßank will stay as a separate entity under its existing management team, but there will be doubts about the future of some outlets in the face of rationalisation pressures. The ANZ would start to work closely with Postßank executives to build up the two retail banking businesses, said the ANZ’s general manager for retail banking, Mr David Butler, yesterday. He confirmed that ANZ would not be looking to end the Bonus Bonds scheme, which Postßank has continued to manage for the Treasury since the early 19705.

Funds in that today are about S7SOM, with the interest applied to providing prizes in regular draws. Under the sale agreement, the Government has undertaken to continue the scheme, until at least April, 1990.

“If there is to be any change, it’ll have to be from the Government side,” Mr Butler said. The ANZ would be happy to continue with the scheme, for which it receives a management fee.