Telecomm's carrier Orange is reinforcing its commitment to mobile banking with a €250 million capital increase in Orange Bank and the buy out of its bancassurance partner Groupama.
With 1.6 million customers in France and Spain, Orange Bank is now one of the top five neobanks in France after four years of existence. The bank claims to be signing over 40,000 new customers every month, with €1 billion in loans to be extended by the end of the year. While the majority of neobanks have continued to deploy a free-to-use model, over 90% of new Orange Bank customers subscribe to a billed service.
Orange believes it has alighted on a successful product model that plays on the convergence of telecomms and finance. In France, the average spending per customer who has also subscribed to an Orange Bank payment facility has doubled. In addition, for every 100 sales linked to mobile telephony, 35 banking sales are made. In Spain, the attrition rate of Orange customers who have subscribed to the Orange Bank offer has halved.
While not yet profitable, Orange says the bank is moving toward breakeven, thanks to an increase in Net Banking Income, up 57% in H1 2021 compared with H1 2020, and a 35% reduction in management costs per customer since 2018.
The firm intends to grow its portfolio of services through partnerships with fintechs. After acquiring French neobank Anytime to address the professional/SME sector and signing a strategic partnership with Younited for credit, Orange says a tender process is currently in progress for new insurance offers.
The value of the agreement to buy Groupama's 21.7% stake has not been disclosed, although the two will retain a commercial referral relationship until at least 2018.
Paul de Leusse, chief executive officer of Orange Bank says: "We would like to thank Groupama for its commitment to Orange Bank's success. We are now speeding up our industrial and geographic development strategy for a bank that is inherently designed to be accessible to everyone and used over the mobile phone"