RNS Number:6394Q
Bank of Ireland(Governor&Co)
08 October 2003


POST OFFICE AND BANK OF IRELAND ANNOUNCE A JOINT VENTURE TO CREATE A POWERFUL
NEW FINANCIAL SERVICES ENTERPRISE

Post Office Ltd and Bank of Ireland Group announced today (Wednesday 8 October
2003) that they have agreed the key commercial terms for a financial services
joint venture. 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 website.

The product range will include personal loans, savings accounts, credit cards,
personal insurance and mortgages.

Post Office Ltd carried out extensive market research over the past 18 months
among 20,000 customers. The research clearly indicated a market for financial
services products offering a combination of trust, simplicity, reliability,
convenience and security - characteristics all associated with the Post Office
Ltd brand.

Post Office Ltd is part of the Royal Mail Group and has one of Europe's largest
retail networks with more than 16,900 branches. It 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.

The joint venture will be owned equally by Post Office Ltd and Bank of Ireland
Group and has an initial term of ten years. Each shareholder will be offered
board representation on the other's board of directors, subject to the relevant
corporate governance procedures.

Bank of Ireland Group will invest #125 million, funded from Group internal
resources, to enable the establishment of the joint venture and provide the core
infrastructure and start up costs. The Group will provide or source the product
range, which will be distributed through the Post Office network.

David Mills, Chief Executive, Post Office Ltd, said:

"There was intense competition to partner Post Office Ltd in this significant
expansion of our service. We selected Bank of Ireland because of its ability to
deliver products that will appeal to our customers and because of our existing
highly successful relationship.

"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. This extensive network and
customer base, coupled with Bank of Ireland's expertise in the development and
delivery of financial services products, creates a business with very exciting
potential.

"Customers know that the Post Office and its people provide them with reliable
service and they trust us. Our new range of products will have great appeal and
I expect Post Office Ltd to become a major provider of personal finance
services. This is great news for our customers, as our employees and
subpostmasters throughout the United Kingdom will be able to offer a much
enhanced range of products."



Mike Soden, Group Chief Executive, Bank of Ireland, said:

"This is an excellent opportunity for Bank of Ireland to extend its reach in the
UK - a market that is central to our strategy. This joint venture, combined with
our existing personal and business banking operations in the UK, gives Bank of
Ireland a unique level of access to the UK retail financial services market.

"We have developed a very good working relationship with Post Office Ltd and its
people and a detailed understanding of the dynamics of its distribution model,
as a result of our collaboration in the foreign exchange business. First Rate
Travel Services generated pre-tax profits of #35 million last year and
underscores the potential of this new venture. I am delighted that we are to be
a part of it.

"It's the beginning of a new chapter for Bank of Ireland in the UK market."

The agreement is subject to binding contracts being entered into and appropriate
regulatory approvals being obtained.

Ends

For further information:

Melanie Corfield/                            Royal Mail Group    44 207 250 2468                    
Ewan McGarrie

David Holden     Corporate                   Bank of Ireland     353 1 604 3833
                 Communications              Group               

Fiona Ross       Investor Relations          Bank of Ireland     353 1 604 3501
                                             Group               
Philip Gawith    The Maitland                                    44 207 379 5151
                 Consultancy                          


NOTES TO EDITORS

   *Bank of Ireland Group is the leading provider of financial services
    products in the Republic of Ireland and has a major presence in the UK
    market, where some 30% of its business is located. The Bank was founded by
    Royal Charter in 1783 and is among Europe's longest established banks. It
    employs 18,000 staff, has assets of Euro90 billion and generated pre-tax
    profits of Euro1.17 billion in the year to 31 March 2003.

   *The Post Office has a network of some 16,900 branches - larger than all
    the banks and building societies put together (around 14,400). 94 per cent
    of the UK population live within a mile of a Post Office branch. The Post
    Office offers 170 products and services, including banking, travel insurance
    and foreign currency, bill payments, lottery products, licence applications,
    phonecards and mobile phone top-ups, and postal services.
   *The Post Office is the second biggest supplier of foreign currency in the
    UK, with 18 per cent of market share, and is in the top five in the travel
    insurance market.
   *The Post Office is the biggest cash handler in the country - with more
    than #140 billion passing through its hands each year. More than 500 million
    household bills are paid at Post Office branches each year - with a value of
    #12 billion. Post Office Ltd turnover was #1,186 billion last year. Post
    Office Ltd is a separate limited company under the Royal Mail Group.

   *The Post Office history began in 1516 when Henry VIII appointed Brian
    Tuke as Master of Posts. In 1660 an Act of Parliament created the Post
    Office, which became a national institution, holding a monopoly in
    communications services for over 300 years. In 1981 telephone work was given
    to a separate company and British Telecom was born



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