Investec’s profit leaps
Investec said yesterday 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 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, to offer insurance and other products that can be added without big capital outlays, amid greater competition in banking from the likes of Discovery and Capitec, said Old Mutual banks analyst Neelash Hansjee.
“Insurance products offer better returns and Investec has access to clients and distribution for the products,” said Hansjee.
Investec’s shares were up about 2.5% at R106 by 11am yesterday after it reported a 17% rise in annual profit, buoyed by its asset management and specialist banking businesses.
Adjusted earnings per share 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.
It raised its full-year dividend to 23 pence per share from 21 pence a year earlier.