Orange creates its own bank in France
Baku, January 14, AZERTAC
French telecom group Orange, which is currently in merger talks with Bouygues, has announced its interest in entering a banking segment with a new partnership with a French insurance group Groupama with a target to establish its own ‘Orange Bank’.
The company has already entered the exclusive negotiations with Groupama and it is expected that the deal will result in potential acquisition of a 65% stake in Groupama Banque by Orange for enabling it to use its existing operational infrastructure.
Both companies also say that the potential synergy effect would help Groupama strengthen its position in online banking business while Orange would diversify its banking services portfolio. The launch of the “Orange Bank” is expected to take place at the start of the next year in France with other European countries, such as Belgium and Spain, to follow. The bank will offer pretty standard banking portfolio such as saving, loans and insurance services.
The project is expected to bring in €400m in revenues in the financial year 2018. For Orange this a step in line with its business strategy assuming a diversification of its assets and operations with a particular focus on mobile banking. Groupama, on the other hand, with the ambition to become a multi-channel bank sees it as an opportunity to accelerate the deployment of its banking offers as well as leverage the local network of Orange shops, it says.
Orange will provide for the project its digital expertise to help develop a fully mobile banking offer. “Orange benefits from a unique combination of essential assets that will enable it to successfully launch a highly innovative, 100% mobile bank. These include a strong brand embodying key values such as security and reliability, a solid distribution network and above all the confidence of 28 million customers in France. The legitimacy in the world of the financial services has already materialised with the success of ‘Orange Money’ in the Middle East and Africa region, and more recently with the successful launch of ‘Orange Finanse’ in Poland. Our partnership with Groupama, which has recognised expertise and key assets in the areas of both banking and insurance, will enable us to accelerate the implementation of our strategic ambition to be able to offer our customers Orange Bank services in France from the beginning of 2017”, says Stephane Richard, Chairman and Chief Executive Officer of Orange.
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