DANISH-OWNED National Irish Bank (NIB) has agreed a deal with An Post to provide cash services at more than 1,200 post offices as the bank moves to a cashless system across its branch network.

Customers will be able to lodge and withdraw cash from post offices under the agreement as NIB closes the traditional bank counters at its branches.

The move is aimed at reducing costs which will lead to the closure of 25 of its 58 branches and a reduction in staff of 150 – or 25 per cent – by the middle of next year.

The new service will be available at post offices from the end of this year.

The bank’s customers will still be able to lodge cheques at NIB branches as well as at post offices from the end of this year.

The bank said it had no plans to offer financial services to An Post customers.

An Post announced the closure of Postbank, its banking joint venture with French bank BNP Paribas, last February.

Kevin Gallen, deputy chief executive of NIB, declined to say how much the switch to cashless branches would save the bank, but said the bank’s cost/income ratio would fall below 50 per cent as a result of its cost reductions.

NIB is not the first Irish retail bank to go cashless. ACCBank, which is owned by Dutch giant Rabobank, withdrew cash services at its branches from January 2009.

ACC is also substantially reducing the size of its business, closing 16 of its 25 branches and cutting almost third of its staff.