Swiss Post Office studies future role of Postfinance

The financial arm of the state-owned Swiss Post Office, Postfinance, is looking at ways of repositioning itself for the future. A project group has been studying possible options, including the controversial question of privatisation of the Postbank.

The financial arm of the state-owned Swiss Post Office, Postfinance, is looking at ways of repositioning itself for the future. A project group set up by the Post’s board of directors has been studying all possible options, including the controversial question of privatisation of the Postbank.

Privatisation is a thorny political issue. The economics minister, Pascal Couchepin, a member of the Radical Party, last year hinted in a newspaper interview that he supported privatisation. “If the Post is active as a bank, I don’t see why the state should interfere,” he said.

A week later, the Social Democrat communications minister, Moritz Leuenberger, denied that the government intended to present privatisation plans to parliament.

The Post Office, which took on a new legal form as an independent public company in January 1998, seems to be taking the issue out of the political arena for the time being by seeking to define its future role itself.

In the past few years, Postfinance has continually widened its offer of investment funds, life insurance and deposit accounts and has become more aggressive in trying to attract bank customers.

In its annual report for 1998, the Post Office said that Postfinance would be focusing on consolidating its market leadership in payment transactions and developing integral solutions for deposits, investment and retirement planning.

At the end of January, the Post Office had more than 100,000 fund accounts with assets of more than SFr1 billion and around 120,000 deposit accounts.

“For Postfinance to be successful on the market in the future it has to cater better to the needs of customers,” says Jürg Bucher, head of the “Postfinance Futuro” project. “A business client is not satisfied with just payment transactions. He wants to earn more from his money and that includes investing and financing,” Bucher added.

Privatisation is not the main theme of the project group’s discussions because being a part of the Post Office family is considered a plus point. “We do not want to throw this trump card away too easily,” says Bucher.

According to the current postal law, Postfinance cannot grant loans and any amendment would need approval by the government and parliament.

The Swiss Bankers Association says privatisation of Postfinance would need to be done fairly. “We are not afraid of competition from the Post Office,” said Gérard Hennet, a member of the Association’s management, “but the competition must abide by the same rules”.

He added that fair competition is not respected at present because there is no separate accounting system for Postfinance to uncover any cross-subsidies, and no control mechanism comparable to bank supervision by the Federal Banking Commission.

The Post Office denies making cross-subsidies, but says it understands the banks’ concerns at the absence of any control mechanism for Postfinance. “But if we are to be subject to the banking law, we also want the same rights so that we can then be in a position to make loans,” said Bucher.

From staff and wire reports