The story had started well. In November 2017, the telecom operator Orange and the mutual insurer Groupama made the event by launching a new banking establishment, Orange Bank, which aims to be modern and inexpensive. “This is the most promising and therefore the most formidable competitor that we have seen for a very long time”, one hears then in the banking world. For the first time, a telecoms giant is breaking into this closed sector, relying on a recognized brand and on a base of 27 million customers for its mobile offer.
Three years later, the two shareholders are preparing to divorce, leaving some feathers. Orange Bank has not kept its promises. It certainly has 825,000 customers in France (including 400,000 customers from the Groupama and Gan networks), but it has accumulated 643 million euros in losses. Between January 2020 and January 2021 alone, it had to be recapitalized three times.
The two shareholders no longer share the same objectives and Groupama is asking to stop the costs. “Our departure agreement was subject to two conditions, explains Thierry Martel, CEO of Groupama. The project would be confined to France and Spain. And since start-ups lose a lot before making money, we put a cap on what the group’s investment would be, at 275 million euros. “
Two groups from very different backgrounds
Beyond this amount, the insurer may no longer subscribe to Orange Bank capital increases. But, faced with the speed with which mobile banking accounts are deteriorating, he changed his mind and finally stopped at the end of 2019, after having injected 187 million euros. Following difficult discussions with Orange, Groupama then undertakes by contract to compensate for what it should have invested with additional revenue. In doing so, she is already stepping outside.
From the start, the two groups, from very different backgrounds, have kept their distance. They do not operate under the same brand. The insurer has chosen to keep the historic name of Groupama Banque, created in 2003, and of which it sold 65% of the capital to Orange in 2016. Orange Bank therefore does not offer the same products, nor the same prices, at Orange and in the mutualist network.
Alongside the Orange offensive, Groupama is moving forward with more caution. By stopping participating in capital increases earlier than planned, “We asked Orange to rebalance, explains Thierry Martel. At the start, the bank lost more money than we had anticipated ”, due to IT delays, disappointing sales and the low interest rate environment, which penalizes deposit banks. “We took 35% of the loss. This weighed on our income statement which, in size, is ten times lower than Orange’s results ”, continues the boss of Groupama, specifying that “80% of Orange Bank’s revenues are produced by Groupama”.
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