Families could save tens of thousands of euro over the lifetime of their mortgage if a non-profit bank was set up, it was claimed yesterday.
The Independent Postmasters Group calculated a €315,000 mortgage on a 30-year loan could potentially realise savings of up to €4,000 a year on interest. The IPG wants to break the monopoly of the so-called pillar banks as well as making sure there are no more post office closures.
It is also calling on the Government to implement a 2016 private members' Dail motion to put a five-year reprieve on closures. It is feared up to 200 post offices are at risk of closing in the next year.
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IPG chairman Tom O’Callaghan said: “Community banking must be reevaluated and developed as a survival option in light of the global economic depression. New Zealand and Germany models should be considered.
“The community and social value of the network, so visibly present during the pandemic, must be recognised as a separate asset to the state and must be protected.” The IPG point out the New Zealand Post Office, which services a similar size population as Ireland, makes €100million profit.
It claims the Kiwi Post Bank has a market share of more than 12%. The IPG maintains the main Irish financial institutions have 95% of the banking market and the exit of KBC and Ulster bank opens opportunities for a Post Office bank.
It also points out in Germany the pillar banks have 12.5% of the market with 87.5% in public banks supporting small and medium enterprises. It is unclear if such a bank would meet European Central Bank rules or how loans could be given out at such low rates of interest when interest rates are rapidly rising globally.
On the other hand there is at least one non-bank lender which was issuing mortgages at low interest rates fixed for 10 years and longer. But An Post insists it already has a strong foothold in financial services and said it is expanding these even further.
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