Sweden Post to sell Postgirot Bank

In late January 2000, the Swedish government decided to allow Sweden Post to sell Postgirot Bank, in a move accepted by postal workers' trade unions. As part of the changes to Swedish postal services, nearly 1,000 "traditional" post offices will gradually be replaced by a basic post service provided in food stores, petrol stations and libraries, and by information technology.

On 27 January 2000, the Swedish government decided that Sweden Post (the national post office) could start to sell off its subsidiary company, Postgirot Bank. The sale may offer the best possibilities for Postgirot Bank to develop its activities, the government stated in an official announcement. Sweden Post itself cannot afford to develop Postgirot Bank into a competitive actor on the banking market.

Björn Rosengren, the Minister of Industry, Employment and Communication, has stated that as the changes in the postal system are going to be considerable in the future, not least for the employees, Sweden Post must fulfil a number of conditions in selling Postgirot Bank: Sweden Post shall continue to provide a basic payment service; changes to the post office network must be delicately handled and lead to better service and opening hours; employees considered redundant must be given training or helped to find a new job; and rural postal delivery services must continue to serve inhabitants in the remote parts of the country.

The implication of these changes in the post office is that about 5,000 employees of Sweden Post are at risk of being made redundant in the next two years, though so far nothing has been decided in this respect. Postgirot Bank, with 2,400 employees, has been run at a loss and with decreasing numbers of clients for some time, as have post offices all over the country. The number of payment transactions dealt with by Postgirot Bank has halved since 1990. Now, 995 traditional post offices are to be closed, and gradually replaced by "post counters" situated in food stores, petrol stations and public libraries. The postal service will in many cases be taken over by these companies or authorities. The information technology network services of Sweden Post will also be further developed to deal with the loss of post offices.

The employees would have preferred Postgirot Bank to become a bank with full banking rights, but they now accept the decision to find a new owner. According to Åke Sehlberg, a representative of the Union of Service and Communication (Facket för service och kommunikation, SEKO) and one of the the employees' representatives on the board of Sweden Post, "selling Postgirot Bank is the second-best alternative." Annette Carnhede, the chair of the Union of Civil Servants (Statstjänstemannaförbundet, ST), states that it is positive that the government has placed conditions on the sale of Postgirot Bank.

In a bill submitted in spring 1999, the government made it clear that Postgirot Bank had to be changed one way or the other in order to face the competition and restructuring that is taking place in the banking industry. However, Sweden Post does not have the resources necessary to develop Postgirot Bank into a highly competitive bank, offering a full range of banking products and payment services, Sweden Post management stated in a press announcement on 27 January 2000. Postgirot Bank is the largest participant in the Swedish payments market with an estimated share of over 40% of the domestic market. The bank has 1 million private clients and around 400,000 company clients. In a favourable new ownership situation, few or no jobs would have to be cut, according to the trade unions, but the outcome remains to be seen.