Orange struck a deal to buy a 21.7 per cent stake in its Orange Bank unit alongside unveiling plans to increase the entity’s capital by €230 million, accelerating a strategy of convergence between telecoms and financial services.
In a statement, Orange explained it agreed to the stake deal with insurance company Groupama for an undisclosed amount, a move Orange Bank CEO Paul de Leusse sped the operator’s industrial and geographic development strategy for the unit.
The closure is subject to customary approvals. Groupama will remain a commercial partner of the banking unit until 2028.
Orange stated the capital increase would go towards maintaining the “technological edge” of the banking business, with the development of insurance and SME services highlighted.
The operator claimed Orange Bank had established a leading position in France in the nearly four years since its launch, with a combined 1.6 million customers across its home market and Spain.
Orange expects the bank to “significantly” reduce its losses in 2021, mainly due to a rise in net banking income and reduced management costs.