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French telco aims to launch Orange Bank at start of 2017, having acquired a majority stake in Groupama Banque.
Orange on Friday announced that it will acquire a 65% stake in France-based Groupama Banque and will transform the business into Orange Bank.
The telco revealed in January that it had entered discussions with insurance firm Groupama regarding its banking business. It intends to use the acquired assets as the foundation of a mobile-specific banking service in its home market, with plans to launch at the start of next year.
Groupama will retain a 35% stake in the bank.
The financial details of the transaction were not disclosed.
"This agreement is a major step forward in our ambition to diversify into mobile financial services as we outlined in our Essentials2020 strategy," Orange chief executive Stéphane Richard said, in a statement.
When they unveiled the telco’s new five-year strategic plan in March last year, Richard and Orange CFO Ramon Fernandez explained that the firm aims to generate €400 million in revenues from financial services in 2018, as part of its bid to reach €1 billion-plus in turnover from new services, including the Internet Of Things (IoT) space.
"Groupama Banque will bring an existing banking structure as well as considerable experience in managing customer relations remotely within a banking context," Richard added. "This will enable us to move forward rapidly in order to provide our customers with an innovative, 100% mobile banking service, first in France and then in Spain and Belgium."
Orange Bank aims to attract more than 2 million customers in France, although its new owner did not share a timeline for that target.
It will offer all the usual banking services, including current accounts, savings, loans and insurance, as well as mobile payment services.
"This partnership…will enable us to leverage Orange’s technical know-how and its expertise in digital services to accelerate our existing online banking activity," said Thierry Martel, CEO of Groupama. "Through this partnership, we are effectively combining two powerful and complimentary brands in order to offer our customers a disruptive banking service."
The companies expect the deal to close in the third quarter of this year, subject to approval from the relevant authorities.
