Bank of America Wins Postal Service Contract

The U.S. Postal Service signed a contract with Bank of America of San Francisco to handle its deposits in California. Bank of America, the third-largest commercial bank in the nation, will handle deposits for the post office’s 2,150 branches in California. Terms of the contract weren’t released. Of the $60 billion in revenue the postal service does annually, “California represents 8.5% of the total cash receipts,” according to Stephen Kearney, Postal Service treasurer. This is the third contract the agency has awarded this year and the second this week. Barnett Banks of Florida was awarded a contract Wednesday, and in April U.S. Bancorp’s First Bank Systems Inc. won a contract in Minnesota. The Postal Service uses about 5,000 of the nation’s banks but wants to reduce that number to 1,000. Having fewer banks and promoting relationship banking brings maximum leverage to a company with large deposits, Kearney said. Bank of America shares declined $2.25 to close at $68.25 in trading on the New York Stock Exchange.