Business Services Industry
U.S. Postal Service Names Bank of America to Service California Post Offices
Business Wire, August 8, 1997
WASHINGTON--(BUSINESS WIRE)--Aug. 8, 1997--Continuing its move to obtain more competitive rates and services as a preferred customer among U.S. banks, the U.S. Postal Service signed a contract Friday with Bank of America of San Francisco to more effectively manage the Postal Service's cash flow from 2,150 California post offices.
A senior postal official Friday announced that Bank of America will handle the daily cash transactions for all California post offices. Bank of America is the nation's third-largest commercial bank, providing financial services to individuals, businesses, government agencies and financial institutions around the world.
``This is a major step in our effort to develop larger strategic business relationships with a smaller number of banks,'' said Stephen M. Kearney, treasurer for the U.S. Postal Service. Kearney said the Postal Service's contract with Bank of America is the third in a series of nationwide steps to ensure the best value for a variety of Postal Service banking needs.
The Postal Service signed a contract Wednesday with Barnett Banks of Jacksonville, Fla., to handle daily cash transactions for all 1,400 Florida post offices. An agreement was signed in April with First Bank of Minneapolis to handle daily cash transactions for 1,200 post offices encompassing all of Minnesota and part of Wisconsin.
``Improved cash forecasting, better use of cash management services and the use of new electronic funds services played major roles in helping the Postal Service produce black ink last year,'' Kearney explained.
``For 1995, we recorded our highest net income ever -- $1.8 billion -- and followed with $1.6 billion net income in 1996 due, in part, to smart banking. We expect a significant net income in 1997, the third year in a row. We're looking forward to continuing this trend with the assistance of Bank of America,'' he added.
``Awarding our California depository accounts to a single bank, Bank of America, truly positions us to take advantage of relationship banking, and to receive the best value in commercial banking services,'' said Marco Lari, Postal Service area treasury coordinator for the Pacific area.
The Postal Service also uses Bank of America for controlled disbursement checking; depository services in Arizona; and the Centralized Automated Payment System, which enables large business customers to pay electronically from multiple locations.
Bank of America operates full-service branches in 10 western states. The company has offices in 37 countries, and is a leading provider of cash and treasury management services, including electronic payment services, wholesale lockbox, check clearing, account reconcilement and information-reporting services.
Bank of America and other financial institutions were evaluated on their past performance along with their operational capabilities and pricing, a process that determines whether the bank will receive more or less business.
Kearney said the decision to consolidate bank services is a key step in the Postal Service's formula for continuing its financial successes. The Postal Service currently banks with one-half of the nation's 10,000 banking institutions and seeks to reduce that number to around 1,000.
About 40 of these are large banks in long-term, beneficial relationships with the Postal Service, and are designated as relationship banks. Kearney said that having fewer banks and further promoting relationship banking brings maximum leverage to a company with such large deposits.
He emphasized, however, that the Postal Service will continue to conduct business with hundreds of small banks serving post offices in small towns throughout America.
``Our company has been doing business with the U.S. Postal Service for 25 years, and during that time we've built a valuable strategic partnership,'' said Frank Abraham, executive vice president of Bank of America's Government Services division.
``Like many of today's successful corporations, the Postal Service is changing its approach to banking, and this contract underscores its demand for relationships that offer experience, innovation and superior technology.''
CONTACT: Bank of America
Cary Walker, 213/228-2558
or
U.S. Postal Service
Mark Saunders, 202/268-2171
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