Westpac seals 10-year Australia Post deal as axe falls on bank branches

Westpac has joined two of its major rivals in signing a banking deal with Australia Post, leaving ANZ as the outlier, as banks continue to cull branches.

Westpac has joined rivals CBA and NAB in signing a long-term deal with Australia Post. Picture: NCA NewsWire / Christian Gilles

Westpac has joined two of its major rivals in signing a long-term banking deal with Australia Post, leaving ANZ as the outlier, as banks continue to cull branches.

Westpac and Australia Post will on Thursday announce a new agreement for agency banking services, valid for 10 years until the end of 2032. It allows the bank’s customers to make deposits, withdrawals and balance inquiries at post offices.

The deal follows Commonwealth Bank and National Australia Bank separately signing new 10-year deals last year for Bank@Post, which provides banking services at more than 3500 local post offices. In 2021, Westpac signed a one-year agreement with Australia Post.

The arrangements require banks to pay the postal service a community representation fee and a variable fee per transaction.

“Our relationship with Australia Post is an important part of our strategy to offer customers a range of different ways to bank with us and gives a long-term commitment to providing banking services in regional and rural communities,” Westpac head of consumer and business banking Chris de Bruin said.

“With small business being the backbone of local communities, business customers can also deposit or withdraw cash and access a range of other banking services.”

But Westpac’s decision comes as it and its large counterparts continue to axe branches around the country, blaming an accelerated shift to digital banking. The latest data from the regulator showed 309 branches shut in the 12 months ended June 30, leaving 4014 branches around the nation.

Australia Post executive general customer and commercial manager Gary Starr said the Westpac deal would help maintain the long-term sustainability of thousands of licensed post offices. “We welcome Westpac’s commitment to Bank@Post for the next decade, ensuring community access to essential banking services is maintained. This announcement is a huge boost to our customers who regularly rely on this access for their banking,” he said.

But ANZ chief executive Shayne Elliott took umbrage with the new Australia Post banking charges in 2018, labelling them unfair and questioning the quantum of the community access fee.

In 2018, the Australia Post community representation fee amounted to $22m per major bank, and the transaction charge was between $2.50 and $3.

Westpac is in the process of cutting branch numbers to reduce costs, with part of that strategy involving merging the branches of its brands including Westpac, St George and Bank of Melbourne.

More than 30 branches have been co-located to date, with plans to co-locate a further 100 in the next 18 months.

Separately, Westpac was appointed to the major lender panel for the National Housing Finance and Investment Corporation’s Home Guarantee Scheme. Its participation starts in July.

Westpac shares rose 11c, or 0.5 per cent, to close at $24.01.