Targobank on the path to becoming a full-service financial institution
With the acquisition of Oldenburgische Landesbank (OLB), the Targobank Group has pulled off a real coup. The German subsidiary of France’s Crédit Mutuel Alliance Fédérale is thus moving into the top ten of the German banking market.
Nonetheless, Isabelle Chevelard, who heads both the holding company and Targobank AG, is careful not to overstate the significance of the deal. „This is not a revolution. We’ve expanded our business several times before,“ the Frenchwoman says of acquisition, which was announced in March, in an interview with Börsen–Zeitung.
Yet with the OLB transaction, the Düsseldorf- based bank is boosting its total assets by around 40% to 79 billion euros in one stroke – leaving its niche role behind once and for all.
Further acquisitions possible
Targobank has been pursuing a broader strategic positioning since Chevelard took over as CEO in 2021. „The OLB acquisition is a milestone in our transformation,“ says the banker, while emphasising that „OLB is just one part of the journey“ toward the goal of becoming a comprehensive financial services group. „Nothing speaks against further acquisitions – but we carefully assess what fits with us.“
Targo Deutschland acquired the factoring and leasing business of GE Capital in 2016. Later BECM Deutschland was integrated into Targobank – having up to then been a sister company. BECM, now operating as Targobank CIB, focuses on corporate banking. Even back then, Chevelard expressed the ambition to evolve into a universal bank.
Though BECM was integrated into Targobank, for now OLB is expected to be spared that fate. „It’s far too early to talk about the future business architecture,“ says Chevelard cautiously. „We will shape that picture step by step.“ She adds, „We are working at full speed to finalise the closing from the first quarter of 2026 onward.“
We are orchestrating everything from the holding.
Under the umbrella of the holding company, there are already seven subsidiaries. OLB, which is set to become the eighth, is expected to retain its independence for the time being. Regardless of the legal structure, CIB is already working closely with the factoring and leasing units – an approach that will also apply to OLB. „It’s unproblematic to run the activities in parallel. We orchestrate everything from the holding level,“ Chevelard explains, emphasising that OLB’s business complements that of Targobank perfectly.
For instance, OLB has a broadly diversified corporate lending portfolio and possesses capabilities that Targobank currently lacks, Chevelard says, citing acquisition financing (LBOs) as an example. In this area, OLB is one of the leading providers in Germany. Conversely, OLB has not yet offered factoring services, whereas Targobank is one of the market leaders in that segment. The target clientele is the upper mid–market. „The great strength of the German economy lies in its strong mid–sized sector,“ Chevelard affirms.
Focus on corporate clients
Including factoring and leasing, OLB and Targobank together hold a corporate loan portfolio totaling 21 billion euros. OLB contributes 10.5 billion euros from its Corporates & Diversified Lending segment. In contrast, Targobank’s loan book in traditional corporate finance (Corporate & Institutional Banking) amounts to just 3.9 billion euros.
In wealth management – an area that has not played a prominent role at Targobank so far – OLB brings particular expertise and a broad range of offerings through Bankhaus Neelmeyer, according to Chevelard.
The purpose of this broader setup is to achieve greater stability in the business. Consumer lending, the roots of the former Citibank, is highly sensitive to economic cycles. Moreover, many banks are active in this segment, explains the Targobank CEO. Although Targobank does not disclose precise figures, risk related costs increased in the last reporting period. The majority likely stemmed from the installment loan business. As a result, the bank has tightened its lending criteria for private customers.
The parent company as blueprint
However, Chevelard’s idea of a universal bank goes much further. Starting next year, the Düsseldorf–based bank plans to relaunch its insurance business. Whereas the bank was previously bound by a distribution agreement with Talanx, it will now work with ACM, a subsidiary of Crédit Mutuel. Just recently, ACM Germany received regulatory approval from BaFin. „Crédit Mutuel developed the bancassurance model in France back in the 1970s. At the time, everyone thought it wouldn’t work. Today, a quarter of the group’s earnings come from the insurance business – sold through branch advisors,“ Chevelard explains.
From her perspective, comprehensive customer service also includes mortgage lending. Targobank has already developed its own offering in this area but has not yet entered the market. „Originally, we planned to launch our mortgage business in 2026. But with the OLB acquisition, it may be pushed to 2027,“ she says.
Parent company business model
„In the long term, we want to transfer our parent company’s business model to the German market", she explains. The plan is backed by strong support from France. Until 2027 – covering a four-year period – the parent group will waive profit transfers. However, that does not mean the transformation of Targobank must be completed by then. 2027 merely marks the end of the current medium-term planning, Chevelard explains, adding: „Our greatest advantage is that we think long–term.“
