La Banque Postale Eyes Retail, Asset Management M&A in Europe

(Bloomberg) -- La Banque Postale SA is seeking to do something unusual for a bank steeped in rural France -- launch out into European M&A. 

The publicly-owned lender, a subsidiary of France’s mail-service operator La Poste, is aiming to generate 20% of its revenues outside France by 2025. That could come through selling services such as corporate leasing, or through the acquisition of a network to distribute products from its subsidiary CNP Assurances, Chief Executive Officer Philippe Heim said in an interview 

“Conceptually, mixing a retailer with a life insurance or an asset-management engine makes sense, because then we straight away have a model that creates value,” Heim, 53, said. “The idea is to see if we can, together with CNP, acquire a retailer and be its privileged life insurance provider.”

Created in 2006, La Banque Postale has gone from a pure retail institution with thousands of branches and post-office outlets across the country to a diversified group with insurance and asset-management activities, as well as an investment-banking unit mostly serving municipalities. The lender aims to generate less than 40% of its revenue from its retail activities by 2025, Heim said. 

After a decade of record-low interest rates, banks across Europe are looking to streamline costly retail networks, either by closing branches, cutting jobs, or merging operations. Earlier this year HSBC Holdings Plc sold its unprofitable French retail unit to Cerberus, and ING Groep NV announced its intention to exit several European markets.

Global Partnerships

CNP has already expanded its international footprint via a series of partnerships. The insurer teamed up with Caixa Economica Federal in Brazil, and is working with UniCredit SpA in Italy. While such partnerships have allowed the unit to gain quick access, Heim said he would rather avoid relying on partners for its future expansion plans. 

Heim is also looking for opportunities in the asset management space as well as to add more asset classes to its dedicated subsidiary, La Banque Postale Asset Management, he said in the interview.

“For us it is relevant to explore other asset classes, notably in real assets, not only in France, but also in Europe,” Heim said. “Asset management is not very capital intensive, it is very profitable, and it brings an answer to the investment needs of our retail or institutional clients.”

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