Orange May Become Bank With Groupama Takeover
France’s Orange has revealed it is in negotiations to acquire a 65% stake in Groupama Banque and set itself up as a fully fledged bank offering savings, loans, insurance and other financial services.
The operator has entered into negotiations with insurance giant Groupama, the owner of Groupama Banque, about a possible takeover. It plans to launch banking services in France — under the Orange Bank brand — in 2017 before rolling them out in other European markets, such as Spain and Belgium.
The initiative clearly ties in with Orange (NYSE: FTE)’s “Essentials2020” strategic plan to diversify its operations. Under that program, unveiled in March last year, Orange aims to generate about €400 million (US$431 million) in revenues from financial services by 2018. (See Eurobites: Orange Plans €15B Networks Upgrade.)
That target looks relatively modest — Orange last year made about €39 billion (U$42 billion) in revenues across its various international markets — but the move into banking would take Orange into new and unfamiliar territory.
Orange is keen to develop a mobile offering through the tie-up with Groupama and believes its network assets, retail presence and brand will aid its expansion into the banking sector.
Groupama, meanwhile, has expressed interest in strengthening its online banking business by developing a “new banking model” in partnership with Orange.