JOHANNESBURG (Reuters) - South Africa-focused bank Investec (INLJ.J) said on Thursday it would expand into offering life insurance to its private clients, as it reported a rise in full-year earnings.
Investec, which focuses mainly on private banking and asset management, said it would offer life insurance from the third quarter of this year to fill what it sees as a gap in its product range.
"I think it is a hole in our offering and it is something we think we can be pretty successful at," CEO Stephen Koseff said during the company's results presentation. "We have had a life insurance licence for decades but we never used it and we feel it's a very appropriate product to offer to our client base."
The expansion is part of the shift by banks, such as Firstrand (FSRJ.J), to offer insurance and other products that can be added without big capital outlays, amid greater competition in banking from the likes of Discovery (DSYJ.J) and Capitec (CPIJ.J), said Old Mutual banks analyst Neelash Hansjee.
"Insurance products offer better returns and Investec has access to clients and distribution for the products. It also serves to improve the fee income or annuity type revenue for the business," said Hansjee.
Investec's (INLJ.J) shares were up about 2.5 percent at 106.00 rand by 1000 GMT after it reported a 17 percent rise in annual profit, buoyed by its asset management and specialist banking businesses.
Adjusted earnings per share (EPS) for the year to the end of March rose to 48.3 pence from 41.3 pence a year earlier.
"The Asset Management and Wealth and Investment businesses have benefited from higher funds under management supported by rising market levels," the company said in a statement.
It raised its full-year dividend to 23 pence per share from 21 pence a year earlier.
Reporting by Tanisha Heiberg and TJ Strydom; Editing by James Macharia and Mark Potter