Orange to transfer bank operations to BNP Paribas as acquisition talks begin.
French telecommunications giant Orange is looking to sell Orange Bank to BNP Paribas in order to exit the banking sector. Exclusive negotiations have now begun between Orange and BNP Paribas, and if successful, this would mark the end of Orange’s banking business.
Orange Bank has faced significant challenges since entering the retail banking industry. The Orange Group entered banking by acquiring a majority stake in Groupama Banque in 2016, under the leadership of CEO Stephane Richard at the time. However, current CEO Christel Heydemann is now working to sell Orange Bank to BNP Paribas.
In an official release, Orange Group announced that it has been seeking a partner for Orange Bank following a strategic review conducted several months ago. The discussions will cover a partnership related to Orange Bank’s French customer portfolio and its Spanish business.
Thierry Laborde, the chief operating officer of BNP Paribas, expressed enthusiasm about the opportunity to assist Orange Bank in its transition out of banking. Laborde stated that as a long-standing partner of the Orange Group and Orange Bank, they are pleased to offer a complete continuity solution to Orange Bank customers following Orange Group’s decision to withdraw from retail banking. They aim to support customers with a comprehensive banking package and high-performance services.
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Orange Bank has experienced significant financial losses since its establishment, amounting to over 1 billion euros ($1.09 billion) according to a Reuters report. Another report indicates that Orange Bank incurred a loss of approximately 200 million euros last year.
According to Agence France-Presse (AFP), Orange Bank may completely exit the banking sector by 2026. If the negotiations are successful, Orange Bank will merge with Hello Bank, the online banking division of BNP Paribas. Hello Bank currently has 800,000 customers in France and a total of 3.3 million customers across Europe. The merger of Hello Bank and Orange Bank, which has over 2 million customers, could create strong competition with other banking giants in the country. Orange Bank currently employs 700 individuals.
The outcome of the negotiations remains uncertain. However, Orange Bank intends to continue its normal banking operations throughout the negotiations with BNP Paribas. Heydemann stated:
“Our priority will be to provide exemplary support for all our employees and customers. This process will be carried out transparently, in consultation with our staff representative bodies.”
Orange Group emphasized in the press release that the transaction only pertains to Orange Bank’s operations in France and Spain. It also stated that the outcome does not impact Orange Group’s financial outlook for the 2023-2025 period. Additionally, the Group commits to conducting all processes transparently and consulting with employee representative bodies. Furthermore, Orange Group assures the full involvement of relevant authorities and regulators throughout the process.
