Post Bank gets a fresh airing

There's more speculation about a re-entry by Australia's government into the business of retail banking, though more in the name of finding viable growth options for Australia Post and its retail network than as a considered policy to patrol the profits of the banking oligopoly.

Crikey reported on Friday that the Australian government "commissioned a scoping study into the establishment of a publicly-owned banking capability by Australia Post, with positive results."

The newsletter did not directly cite the report nor, beyond this broad brush conclusion, cite any analysis produced by the study.

The Age and Sydney Morning Herald followed on Saturday with a report that "for several weeks talk has circulated in banking circles that the Rudd Government was looking at replicating Kiwibank here."

The newspapers reported on talk of commissioning a scoping study from a former bank executive. This person disclaimed any involvement when contacted yesterday.

Both media emphasised that one context for the study is the need for Australia Post to diversify its business.

Speculation over this prospect emerged a few months ago when the board of Post hired Ahmed Fahour as chief executive. Fahour served for several years as CEO of National Australia Bank's Australia business.

An Australia Post-linked entry into banking is doable, though the idea is probably not as attractive as past and current proponents might think.

The market share won by Adelaide Bank, BankWest, Bendigo Bank, ME Bank, ING and, at times, others, has never reached much beyond three or four per cent in any product segment in Australia, and is usually less.

And Kiwibank, for all the bile directed its way by Australian bank executives for operating in a non-commercial manner, also has attracted only a minor share of New Zealand's banking market and is starting to test the ability of NZ Post, and the New Zealand government, to fund its capital requirements.