BNB Paribas Enters Negotiations For Orange Bank Takeover

Orange, the largest telecoms operator across France, has announced that it has entered strategic talks with the BNB Paribas bank. The goal of these discussions is to bring online retail banking clients to Orange Bank under BNB Paribas.

BNB Paribas in talks to acquire Orange Bank

Orange issued a statement on Wednesday confirming that the planned takeover was indeed happening if the talks were successful. If the takeover happens, it will put an end to the efforts being made by Orange toward the retail banking industry.

Orange first ventured into the retail banking space in 2016. At the time, the financial institution secured a majority stake in Groupama Banque. This acquisition deal represents a key strategic decision by the company. Orange Bank’s venture into the retail banking space was led by the former CEO of Orange, Stephane Richard.

Richard was replaced as CEO by Christel Heydemann. Heydemann has now decided to halt operations in the online retail banking division of the company. According to sources close to the matter, the decision was confirmed after a strategic review.

“The evolution of the banking market now leads us to guide the bank into a new phase. 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,” Heydemann said.

Despite the confirmed efforts by the company on this development, the telecoms operator has faced challenges securing a buyer for its online bank. The division has not been performing well, given that it has reported over 1 billion euros, equivalent to $1.09 billion worth of losses since its release.

Acquisition to affect the dominance of traditional French lenders

The end of the efforts made by Orange toward the online banking industry will hamper the dominance of traditional French lenders in the banking industry. The largest lender across France is Societe Generale’s Boursorama, which has emerged as a leader in the country with nearly five million clients.

French banks are also facing immense competition from financial institutions across Germany, such as Germany’s N26 and the UK’s Revolut. The talks between BNB Paribas and Orange are also aimed at creating a partnership deal under which the retail clients at Orange Bank will become the customers of Hello Bank by BNB Paribas.

Orange Bank is among the largest banks across Europe, with 2 million clients in Spain and France. The number includes 1 million clients that have secured insurance contracts managed by the Cardif insurance division at BNB Paribas.

Around 500,000 French retail clients will also move to BNB Paribas’ Hello Bank after the acquisition. The deal is aimed at luring these clients into securing attractive deals. The online banking division for BNB Paribas has 3.3 million clients across Europe, with 800,000 of them being in France.

This partnership deal poses some potential challenges for it to succeed. The fate of 700 employees that are employed at Orange Bank is still not known. The telecoms operator plans to redeploy these employees at the company.