Seán Canney (Galway East, Independent)
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202. To ask the Minister for Finance the steps being taken to create a community banking system within the post office; and if he will make a statement on the matter. [56309/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, my Department published a report in December 2019 by Indecon Consulting on an Evaluation of the Concept of Community Banking in Ireland. This was a follow on to a previous paper on Local Public Banking published by my Department in 2018.

The Indecon report concluded that there is no business case for the State to establish a community banking system in Ireland; supporting the outcome of the previous report on Local Public Banking. The report notes that the Exchequer costs and risks involved would not be justified. The report also notes concerns over the ability of a new State owned bank to provide effective competition.

The role of the Department of Finance in relation to the provision of financial services by the post office network relates primarily to payment services. As Minister for Finance, I have authorised An Post to provide these services under the Postal and Telecommunications Services Act 1983 (Section 67) Order 2016.

An Post is a body under the aegis of the Department of the Environment, Climate and Communications. Responsibility for all other matters related to the post office network is held by the Minister for the Environment, Climate and Communication, Mr Eamon Ryan, TD.

While Indecon’s report concluded there are some areas of market failure, it noted that there is extensive provision of, and access to, banking services through bank branches, credit union offices and An Post branches, as well as a wide range of Exchequer funded existing supports. Notwithstanding recent announcements in the banking sector, this continues to be the case.

The Indecon report looked at An Post, noting that there is a significant network of post offices in areas where there is no bank branch within five kilometres. An Post has begun transforming its retail network by delivering new financial products. These include loans, credit cards and more foreign exchange products, local banking in association with the major banks and a full range of state savings products.

Two new dedicated sub-brands, An Post Money and a new business-to-business brand, An Post Commerce, were launched in 2019. An Post invested €50 million in the network to encourage communities to use the enhanced services in their local post office.

The Government is committed to a sustainable An Post and post office network as a key component of the economic and social infrastructure throughout Ireland. This commitment can be seen in the recent agreement by Government that €10 million per annum will be provided to An Post from within the existing capital provision of the Department of Environment, Climate and Communications, over a three-year fixed term 2023–2025.

This funding aims to ensure access to important services of social value across the post office network throughout the State. These include banking services, social welfare and state savings, together with SME services and support. Currently 900 Post Offices are providing these essential services nationwide, acting as an important community-based provider, in relation both to access to credit and to basic financial services.

As the Deputy may also be aware, on 23 November 2021, I published the terms of reference for a broad-ranging review of the retail banking sector in Ireland. This review will consider retail banking in a broad sense. The review team is well advanced in drafting the report, which I expect to be delivered to me shortly.