* Hello Bank targets 1.4 mln customers by 2017
* To launch in Germany and Belgium first
PARIS May 16 BNP Paribas, France's
No. 1 listed bank, will spend 80 million euros ($103 million)
this year to launch a Europe-wide online bank as lenders cast
their net wide for funding in a slowing economy.
BNP said on Thursday its new brand, "Hello Bank", would aim
to gain 1.4 million customers by 2017 and would first launch in
Germany and Belgium before arriving in France and Italy later
Online banking is seen as a more cost-effective way of
bringing in customer deposits than physical branch networks,
which are traditionally a strong revenue source for French banks
but which face cutbacks as recession bites.
While BNP is very exposed to mature European markets and
owns major subsidiaries in Italy and Belgium, it has only
recently begun a fresh push for German business.
"This is above all a plan to get new customers," said BNP
Chief Operating Officer Francois Villeroy de Galhau, who gave
few financial details but said the new brand would aim to at
least break-even in each country within four years.
There was little in the details BNP did give about the new
bank to suggest how it will stand out from the crowd in Europe's
biggest banking markets, including among Germany's 80 million
The company would not say what savings rates Hello Bank
would offer but the brand is offering one-off cash gifts to new
customers and a small return - 0.25 percent - on some current
Europe's banks are seeking to bolster their balance sheets
and cut costs as the euro zone struggles with recession and as
new rules on minimum solvency and funding requirements -
designed to make banks safer after the crisis - come into force.
French banks like BNP and Societe Generale have
pledged to keep cutting costs at home while gathering deposits
and boosting business abroad.
EU online-bank users increased by 15 percent between 2006
and 2010, according to Deutsche Bank research, with France and
Belgium among the top-three increases with more than 20 percent.
Despite the potential growth on offer, there is also plenty
of competition. Beyond the many online brokers and banks
currently offering accounts, Deutsche Bank says tech giants like
Google, Amazon or Apple may start
offering standardised financial services.
($1 = 0.7775 euros)
(Reporting by Lionel Laurent; editing by Patrick Graham)