France's Orange enters exclusive talks with BNP Paribas to exit retail banking
Reuters
Published Jun 28, 2023 20:06
Updated Jun 28, 2023 22:03
By Mathieu Rosemain
PARIS (Reuters) -Orange, France's biggest telecoms operator, is opening exclusive talks with bank BNP Paribas (EPA:BNPP) with the aim of bringing its online retail banking clientele under BNP Paribas' umbrella, Orange confirmed in a statement on Wednesday.
If successful, the talks would put an end to Orange's venture into the retail banking sector, which started after the acquisition of a majority stake in Groupama Banque in 2016 and represented a key strategic move by former Orange CEO Stephane Richard.
Richard's successor, Christel Heydemann, decided to get rid of the loss-making unit following a strategic review, sources close to the matter said.
But the telecoms operator, advised by M&A firm Lazard, has faced difficulties in trying to find a buyer for its online bank, which has piled up more than 1 billion euros ($1.09 billion) of losses since its launch, the sources said.
The end of Orange Bank's experiment would confirm the domination of French traditional lenders in the online banking field, with Societe Generale (EPA:SOGN)'s Boursorama being the clear leader with close to 5 million clients in the country.
Other independent digital-only banks like Germany's N26 and Britain's Revolut also compete against French banks.
The BNP Paribas-Orange talks would aim to create a partnership under which Orange Bank's retail clients would be invited to become customers of BNP Paribas' online bank Hello Bank!, the sources said.
Orange Bank boasts 2 million clients in France and Spain, a figure that also includes close to 1 million clients who signed insurance contracts managed by BNP Paribas' Cardif insurance division, the sources said.
A fourth of this clientele -- 500,000 -- are French retail clients who would move to Hello Bank!, which will aim to lure them via "attractive offers", the sources said.
BNP Paribas' online bank has 3.3 million customers in Europe, out of which 800,000 are in France.
Potential hurdles for the would-be partnership to succeed include the fate of the 700 employees currently employed by Orange Bank, which the telecoms operator will aim to redeploy within the company, the sources said.
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Written By: Reuters
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