La Banque Postale in danger: will the French bank emerge from the storm ?

© Shutterstock

Things are not going well for La Banque Postale. The French bank is recording a catastrophic first half of the year. Its net profit fell 11.3% from a year earlier to $515 million. euros.

This significant drop is mainly attributed to the slowdown in the activities of CNP Assurances, its insurance subsidiary. Despite this poor performance, CNP Assurances remains the group's main financial driver.
Net banking income, equivalent to turnover in the banking sector, reached 3.65 billion ;#8217;euros between January and June, , a decrease of 5.6% compared to the same period the previous year.  A performance which reflects the difficulties encountered by the bank in its main activities.

Stéphane Dedeyan, Chairman of the Executive Board of La Banque Postale, highlighted the impact of the uncertain macroeconomic and financial context on the group's results. In particular, he pointed to the decline in insurance revenues as the main factor behind this decline.

Insurance does not insure

CNP Assurances, which became a wholly-owned subsidiary of La Banque Postale in June 2022, saw its profits drop by 15% in the first half of the year. This decrease is presented as a “return to normal” after an exceptional year in 2023. But this normalization highlights the group's dependence on its insurance activities.

The situation is particularly alarming for retail banking in France. This segment of activity has proven to be a real financial black hole, reporting a net loss of 707 million euros in 2023.This poor performance highlights the structural difficulties faced by La Banque Postale in its historic core business.

Analysis of results by geographic area reveals a worrying trend. In France, the combined net income of banking and insurance fell by 39.3% over one year, reaching €215 million in the first half. Internationally, although less pronounced, the decline remains significant with a net profit of 128 million euros, down 25% compared to the previous year.

200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000

Transformation plan and cost-saving measures

Faced with these challenges, La Banque Postale has implemented an ambitious transformation plan. Stéphane Dedeyan states that this plan, which focuses on streamlining unprofitable activities and better controlling costs, is starting to bear fruit,

The group has set itself a savings target of 200 million euros for the current year. This approach is part of a desire to get back on track and adapt the bank's business model to a changing economic environment.

Among the most significant measures, the closure of Ma French Bank, the group's online bank, announced last December, is undoubtedly the most significant. This decision illustrates La Banque Postale's desire to refocus on its most promising activities and to withdraw from segments deemed non-strategic or unprofitable.

More customers

Despite these difficulties, La Banque Postale continues to attract new customers. In the first half of the year, it attracted 249,000 new individual customers, proof that its brand retains a certain appeal among the French public.

But La Banque Postale's situation remains complicated. It reflects the broader challenges facing the traditional banking sector. Faced with growing competition from neobanks, the accelerated digitalization of financial services and an uncertain economic environment, established institutions must rethink their business models and optimize their operations.

The future of La Banque Postale will therefore depend on its ability to successfully carry out its transformation plan, to revitalize its retail banking activities while capitalizing on the strength of its insurance division. The support of its shareholders, in particular the Caisse des Dépôts et Consignations, could prove essential in this transition period.

• La Banque Postale records an 11.3% drop in its net profit in the first half of 2024.
• Insurance activities, via CNP Assurances, remain essential to keep the group afloat.
• A transformation plan targeting savings of 200 million euros and the rationalization of unprofitable activities is underway.

📍 To not miss any Presse-citron news, follow us on Google News and WhatsApp.