French telecoms firm Orange has agreed to acquire a 65% stake in Groupama Banque as part of its plans to enter the European banking market.
Groupama Banque will be renamed Orange Bank and will retain a 35% stake in the company..
Orange Bank will launch a banking service as early as the start of next year designed specifically for mobile usage in France.
The bank’s services on mobile phones will include existing accounts, savings, loans and insurance services, as well as payments. The company intends to attract more than two million mobile banking customers in France.
The digital platform for mobile phones would use Groupama Banque’s existing client network, which had over 530,000 customers and outstanding deposits of more than €2.1bn at the end of last year.
The deal will allow Groupama to use Orange’s technical know-how and its expertise in digital services to speed up the existing online banking activity.
Orange chairman and CEO Stéphane Richard said: "This agreement is a major step forward in our ambition to diversify into mobile financial services as we outlined in our Essentials2020 strategy.
"Groupama Banque will bring an existing banking structure as well as considerable experience in managing customer relations remotely within a banking context.
"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."
The transaction, which still requires regulatory approvals, is anticipated to be completed in the third quarter of this year.
Orange already has experience with basic payments services through Orange Money, which was launched in the Ivory Coast in 2008.
The service, which allows users to transfer money and pay bills, currently boasts approximately 18 million customers and is available in 14 countries across Africa and the Middle East.
Last month, Orange and Ecobank launched a bank-to-wallet money transfer service linked to Orange Money in Côte d’Ivoire, Guinea Conakry and Niger.
Orange has a presence in 28 countries. The company ended 2015 with a total of 263 million customers, including 201 million mobile customers and 18 million fixed broadband customers.
Earlier this month, Orange failed to agree terms on a proposed acquisition of Bouygues Telecom which could have consolidated France’s telecoms market.
