Postbank, the bank jointly owned by An Post and French bank BNP Paribas, has said it plans to wind down by the end of the year.

In a statement, the bank said the bank would continue until the end of 2010, but not beyond then. It will not be accepting new banking customers from Monday.

It said customers did not need to take any action at the moment. Postbank has said it will be writing to its 170,000 customers in the coming weeks. Deposits will continue to be covered by the Government's guarantee scheme.

Postbank employs 260 people, but says it hopes a 'significant proportion' of these can be saved, as it hopes some of its financial products could be developed further. The main question mark hangs over 128 people working in its banking business, mainly based in Dun Laoghaire.

It operates banking, savings and investments, and insurance services in around 1,000 post offices across the country. It is understood An Post held discussions with other potential partners for the venture, but to no avail.

Postbank chairman Thierry Schuman said a number of factors led to the decision to close. These included the unprecedented difficulties in the financial services sector and the intense competition for savings in Ireland. He also said the bank's shareholders could not see any sign of profitability in the current circumstances.

The Financial Regulator said it was working with Postbank to ensure that customers' interests were protected in accordance with the Consumer Protection Code.

It pointed out that Postbank's decision did not affect An Post savings accounts, which will continue to operate as normal.

Customers with any concerns or questions about their accounts are advised to contact Postbank directly on 1890-303040 on

The general secretary of the Communications Workers Union, Steve Fitzpatrick, said the decision to shut Postbank would be seen as a missed opportunity to provide streightforward banking services to ordinary people through the post office network.

He said there was an opportunity for another provider to replace BNP Paribas, and the union would be pressing An Post management to secure the future of the business before the end of the year.