Orange Bank remains in the red in 2021, new losses of 166 million euros, and the transition to green is expected for 2024

Orange Bank remains in the red in 2021, new losses of 166 million euros, and the transition to green is expected for 2024

Orange Bank: More losses in 2021

The Orange Bank mobile bank, launched in 2017, is still logical in its opening phase, in a competitive market and in need of focus. Showing financial losses is by no means surprising, the early years were an investment phase. It is necessary to reach the critical mass of customers in order to hope that you will be able to generate profits. Thus, the net loss was reduced by 13.5% last year, revealed the consolidated accounts of Compagnie Financière d’Orange, the holding company that owns the telecom operator’s bank and the new bank for professionals at any time acquired in January 2021. To 156 million euros for 2021 according to the bank’s financial report 2021. Since its launch in 2017 thanks to the acquisition of a majority stake in Groupama Banque, Orange Bank has continued to accumulate losses. Over the past four years, it amounted to 809 million euros, which is the amount indicated by Agefi.

profitability target for 2024

Too many players for a target that has been largely diverted by fintech, providing only means of payment and at a lower cost. Orange Bank has demonstrated its desire to be profitable from 2024. To do this, the mobile bank intends to aggressively develop “cross-selling” by significantly increasing the rate of equipment for its existing customers. Thus, the equipment rate should increase from the current 25% to 45%. Holy challenge! To do this, Orange Bank doubled down on partnerships in both consumer credit (microcredit) and mortgages (preto). Orange Bank is actively looking for a partner to provide insurance, as its historical partner Groupama, having sold its shares in its mobile banking services to him, wants to withdraw in the long term.

The commercial success of the premium package

These are the nerves of this online banking war. While ING dropped the case, its customer base was not large enough to hope it would be profitable, Orange Bank must evolve and introduce new attractive offers. Thus, in 2021, Orange Bank continued to develop its offerings and launched a

Big shift.

  • Premium Package 2 : In November 2021, Orange Bank announced two new features related to the Premium Package, the first relating to parental participation (initially reserved for Premium Pack holder only) and the second the ability to present the Premium Card to the person of their choice. All this at a fixed price of €12.99 per month. Orange Bank’s goal is to make budget management easier for families.
  • release DOMEX in Spain In October 2021, the Spanish branch of Orange Bank launched a consumer credit offer for customers who do not have an Orange Bank account.
  • Buy back Slovakia : The Spanish branch of the bank executed a buyback of Telco’s portfolio of receivables from Orange Slovakia for €15 million in November.
  • 2021.
  • Launching the One Bank Project : Orange Bank began in 2021 the launch of the “One Bank” project, which consists in the implementation of a European organization of the bank and a single IT platform, including the upgrade of the Spanish IT platform and the migration of the French IT platform to the latter. This development will enable Orange Bank to have a single, streamlined operating model in Europe, common tools, compatible operations, a single product suite and identical customer experience between countries. From an accounting point of view, this project accelerates the rate of depreciation of fixed assets that have been identified as having to be abandoned once the individual platform is operational.

Orange Bank partners

  • Anonymous Credit: Orange has chosen United as its consumer credit partner. This technology partnership will target the key links in the bank’s consumer credit value chain: underwriting, granting, administration and collection. Initially, publication will focus on subscription and grants (during 2022). This new platform will allow Orange Bank to offer the personal loan offer to its customers on a larger scale and especially to Orange customers, in addition to the loan offer already available in Orange stores. The collaboration with United is a qualitative step forward for all Orange Bank teams who will benefit from a new, more efficient tool.
  • Pretto: In 2021, Orange Bank also partnered with broker Pretto regarding mortgage marketing. This partnership will enable Orange Bank to expand its mortgage loan offer to new clients.

Groupama share purchase

During fiscal year 2021, the Orange Group entered into an agreement with its historic partner, Groupama, to purchase 21.7% of the latter while maintaining its business relationships. In fact, Groupama continues to be a trading partner of Orange Bank, by extending the concession until 2028 for the day-to-day banking and consumer credit that Groupama provides to its customers.

Number of Orange Bank customers

Orange Bank attracted 1.9 million customers in France. However, its customer base is slowly growing (+5%).

nation Number of Orange Bank customers
France 1,900,000
Spain 144,000
Ivory Coast 80000

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