Orange backs out of banking with BNP Paribas deal

French operator group Orange has decided to leave the retail banking game just five years after it arrived, brokering a deal that should see it transfer its customer base to BNP Paribas.

The French telco group revealed this week that it has completed a strategic review of its banking operations and has entered into exclusive talks with major banking group BNP Paribas geared towards supporting its existing customers in France; essentially, they will be transferred to BNP Paribas services, should they so desire. The pair will also looks at developing financing solutions for mobile devices and will discuss a possible takeover of Orange Bank in Spain, the telco said.

So, presuming the negotiations progress as expected, we’re looking at the end of a – pretty short – era for Orange in an adjacent market.

It took Orange a while to get Orange Bank off the ground, launching as it did at the back end of 2017. Customer acquisition was steady – at the end of 2022 the company reported serving 2 million banking customers in Europe – but making money proved challenging, to say the least, and the telco’s ambitious expansion plans never really came to fruition. Having once aimed to turn a profit by 2023, the firm gradually pushed back its breakeven target, and while it succeeded in launching in Spain in 2019, it went quiet on plans to introduce the bank to Belgium, Poland and Slovakia.

Orange Bank was part of former chief executive Stephane Richard’s vision for the company, but a change at the top and the arrival of Christel Heydemann as his successor in early 2022 brought a change in direction; the telco group initiated its strategic review later that year and it seems Orange Bank is on the way out.

“The evolution of the banking market now leads us to guide the bank into a new phase,” said Heydemann, in a very carefully-worded statement on Wednesday.

“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,” she said.

Orange is about to embark on the various consultation procedures it needs to follow with employee groups, and insists it will keep staff informed and seek to retrain and redeploy them within the group. It added that it will also work closely with the relevant authorities and regulators. It’s clearly a very sensitive area.

Similarly, customers will doubtless be concerned about what will become of the various banking, insurance and loan services they have procured through Orange Bank. It’s pretty clear that BNP Paribas is not buying the Orange Bank customer base, but rather offering alternatives to those customers and assisting with the transition; its Hello Bank digital banking service will be a likely destination for many.

“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,” noted Thierry Laborde, Chief Operating Officer of BNP Paribas.

While Orange is explicit that it is exiting banking in Europe, the timescales associated with that exit are still undecided, it seems. Orange said it will “progressively withdraw Orange Bank from the retail banking market in France and Spain,” and has taken great pains to point out that day-to-day banking services will be unaffected in the meantime.

It is clear that this whole process will take some time. Retail banking in Europe was never going to be an easy business to get into…and it’s not easy to get out of either.


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