Game over for Ma French Bank. A latecomer to the 100% mobile banking market, La Banque Postale decided to shut down its subsidiary five years after its launch with much fanfare. On December 18, it informed the employee representative bodies of what is still only a study “plan for the termination of the activity» within 12 to 18 months, the result of which cannot be doubted. All 161 employees of the structure, located between Lille and Paris, will be offered reclassification within the group.
This first major strategic decision by the new chairman of the board of La Banque Postale, Stéphane Dedeyan, illustrates the difficulty of purely mobile banks in finding a path to profits. “Despite its undeniable success with customers, Ma French Bank has not achieved profitability and has not yet found its economic model.», Indicates the press release of the group. The subsidiary essentially offers a current account and payment card service to 750,000 customers who can rely on La Banque Postale services if they want. Expanding the offer to savings and loan products, which are necessary for profitability, would require investments that the group is no longer willing to make. Especially since La Banque Postale is committed to digitizing its offer.
“It’s never a good political signal to shut down, but the most important thing is that no employee or customer is left behind.», notes the union representative fatalistically.
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France’s Bank Ma accumulated net losses of 255 million euros over five years, from 2018 to 2022, according to the social accounts of the organization consulted Agefi. Last year it reported a net loss of almost 61 million on a net banking income of 18 million, which is significantly higher, but only from commissions. With annual fixed costs of around 75 million, it seemed impossible to break even in the short term, and the 300 million mark of cumulative losses is likely to be exceeded at the end of 2023. La Banque Postale does not comment on these figures.
The project, which was announced in 2016, also suffered from delays in ignition. Ma French Bank started its operations only at the beginning of 2019, in a market cluttered both by offers from large banks and by new players, whether from telecommunications (Orange Bank) or purely fintechs (N26, Revolut). Within five years, it targeted a million customers. Meanwhile, BPCE has given up a stand-alone mobile bank (Fidor), Orange has closed the bank, as has ING Direct in France, while Crédit Agricole is attempting one last launch of BforBank. Apart from Fortune, only BoursoBank is starting to reap profits this year due to rate hikes at the cost of Société Générale’s massive investments.
Waiting for profitability