France is set to create a new French bank. This has occurred by merging the banking unit of the postal service company La Poste with insurer CNP Assurances, reported Reuters.
The initiative aims to provide an opportunity to La Poste, which is currently struggling will falling postal business, to revamp its operations.
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The deal will give CNP access to La Poste’s expanding banking services across the country.
Reuters quoted French Finance Minister Bruno Le Maire as saying: “You can see that there is an absolute necessity to reinvent La Poste’s business.”
He added the postal services were plummeting by around 7% annually generating a loss of $654.58m in revenue per year.
The La Poste and CNP merger will be carried out through the government-owned investment fund La Caisse des Depots et Consignations, which holds minority stakes in both the entities.
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By GlobalDataIt will transfer its 41% interest in CNP Assurances to La Poste and acquire additional stake in La Poste to increase its ownership in the postal company between 50% and 60%.
Following the merger, the new entity will focus on offering banking and insurance services in the rural areas.
French bank BPCE, which holds 18% stake in CNP Assurances, is expected to retain its ownership following the deal.
However, the affect of the deal on CNP Assurances’ minority stakeholders, which jointly own about 22% in the insuring company, is yet to be ascertained.
