The U.S. Postal Service has awarded NationsBank Corp. and Banc One Corp. contracts to handle depository services for more than 1,600 post offices in three states.
NationsBank, Charlotte, N.C., will manage cash for 700 post offices in Virginia, and Columbus, Ohio-based Banc One will handle the deposits of 912 offices in Kentucky and Indiana.
Both banking companies have won similar contracts in other states. The deals are part of the Postal Service's effort to cut costs by reducing its total of banking relationships.
It does business with 500 banks but hopes to reduce the total further as consolidation continues, said Stephen Kearney, treasurer.
"We started a little more than a year ago with 5,000 banks. By the end of the year, we should be down to around 25," he said.
To date, the agency has awarded 29 contracts to 15 banks involving offices in 42 states.
"Strategic banking relationships, like the ones we are signing today, ensure a high level of service from the bank and reduce costs," Mr. Kearney said.
- Steven Marjanovic