Bank of Ireland is to invest £125 million in establishing a financial services joint venture with the UK Post Office.
The new company will launch Post Office branded financial services products early in the New Year through the Post Office branch network, via the telephone and over the Web. The product range will include personal loans, savings accounts, credit cards, personal insurance and mortgages.
The UK Post Office network is one of the largest in Europe with more than 16,900 branches.
David Mills, chief executive, Post Office Ltd, says: "Post Office Ltd's retail network is larger than all the UK banks and building societies put together. Our branches serve approximately 29 million people who make some 42 million visits to our branches each week; 27 pence in every £1 in circulation passes through a Post Office branch."
The Post Office already operates a joint venture with Bank of Ireland in foreign exchange - First Rate Travel Services. This was established in March 2002 and is the UK's second largest foreign exchange provider to retail customers.
Mike Soden, group chief executive, Bank of Ireland, comments: "First Rate Travel Services generated pre-tax profits of £35 million last year and underscores the potential of this new venture."
The joint venture will be owned equally by Post Office Ltd and Bank of Ireland Group and has an initial term of ten years. The Irish bank is to invest £125 million to enable the establishment of the joint venture and provide the core infrastructure and start up costs.