After sustaining more than 1 billion euros in losses, Orange has decided to exit retail banking and has begun negotiations with BNP Paribas.
French telecommunications giant Orange is looking to get out of the banking sector by selling Orange Bank to BNP Paribas. Orange has now begun exclusive negotiations with BNP Paribas, which would end Orange’s banking business if successful.
Orange Bank has faced a little too much difficulty since the telecoms giant ventured into retail banking. The Orange Group began banking after buying a majority stake in Groupama Banque in 2016. At the time, Stephane Richard oversaw the acquisition and new business as the CEO. However, the current CEO, Christel Heydemann, is now getting rid of Orange Bank, hoping to sell it to BNP Paribas.
In an official release, Orange Group says it began searching for a partner for Orange Bank after a strategic review months ago. The discussions will cover a partnership related to Orange Bank’s French customer portfolio and the bank’s Spanish business.
BNP Paribas chief operating officer Thierry Laborde expressed enthusiasm at the possibility of helping Orange Bank with its transition out of banking. According to Laborde, “as a long-standing partner of the Orange Group and Orange Bank, we are naturally delighted to be able to provide a complete continuity solution to Orange Bank customers following Orange Group’s strategic choice to withdraw from retail banking…we will support customers with a solid banking package and high-performance services.”
Orange Bank has sustained heavy losses since its inception, more than 1 billion euros ($1.09 billion), according to a Reuters report. Another report states that Orange Bank lost about 200 million euros last year.
According to Agence France-Presse (AFP), Orange Bank could be done with banking entirely by 2026. If negotiations go well, Orange Bank will merge with Hello Bank, the online banking arm of BNP Paribas. Hello Bank has 800,000 customers in France and a total of 3.3 million in Europe. Successfully combining Hello with Orange’s over 2 million customers could put the merged company in fierce competition with other banking giants in the country. Orange Bank also has 700 employees at the moment.
Whether or not the talks will yield fruits remains to be seen. Nonetheless, Orange Bank intends to maintain normal banking operations throughout its negotiations with BNP Paribas. Hydelmann said:
“Our priority will be to provide exemplary support for all our employees and customers. This process will be carried out in complete transparency, within the framework of our dialogue with our staff representative bodies.”
Orange Group notes in the press release that the operation only concerns Orange Bank’s business in France and Spain. It also states that the outcome does not affect Orange Group’s financial outlook for the 2023-2025 period. Also, the Group promises to conduct all processes in full transparency, and consult with employee representative bodies. Furthermore, Orange Group assures the full involvement of relevant authorities and regulators throughout the process.