Banking Business Case Recommended To Shareholder

15 December 2000

The Board of New Zealand Post has considered the business case for the provision of banking services within the New Zealand Post retail network and recommended it to Shareholding Ministers for their approval.

“This is a positive outcome for New Zealand Post, our retail team and the more than 700,000 customers who use the network each week,” New Zealand Post Chairman Ross Armstrong said today.

“The proposed bank will be for all New Zealanders. It will offer a range of simple, easy to understand services that represent value for money for customers, the convenience of the Post Shop network and the benefit of being New Zealand owned.

“The business case has been rigorously tested and the Board is satisfied that it will add significant value to New Zealand Post and its owners, the people of New Zealand.

“As with any start-up business strategy it is not without risk, but the Board is confident that there is sufficient flexibility in the proposed business to respond to adverse circumstances and still create value.

“Establishing a bank takes time and costs a lot of money. New Zealand Post will be talking with Shareholders about funding options over the summer to enable a Shareholder decision on the proposal as early as possible in the New Year.

“The Board is satisfied that the number of customers expected to join the bank in its first three years is achievable given the huge interest which has been shown in this proposal over the last six months.

“If the base case assumptions are met, the bank will create substantial profits and value for the business in the long-term.

“Today’s decision was a further step in the process. Assuming Shareholder approval in January 2001, it is likely that the bank would open for business in February 2002.”

ENDS

For further information:
Simon Taylor, New Zealand Post Media Relations Manager
04 496 4015 or 025 248 6715

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