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Investec is going after
a slightly younger client base
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Investec's private bank is targeting a new client base in its domestic market ? it is going after schools.
Investec Private Bank South Africa's customers are professionals and those with a net asset value of around R5 million ? equivalent in relation to cost of living and house prices to between £1 million and £2 million in the UK or $1.8 million to $3.6 million in the US, according to Michael Barr, head of Investec Private Bank in Western Cape.
By promoting products in South Africa's private schools, the bank hopes to attract a wider group of the affluent, including parents and grandparents of pupils, and former pupils. The initiative is starting at Bishops, a top independent school for boys, which in return will receive a portion of generated banking fees as well as a percentage of the total capital advanced for all lending transactions.
Commercialism in schools is often regarded as unethical. The promotion of Investec's products at Bishops, however, was initiated by the school itself, and Barr regards the move as "sponsorship".
Funding for bursaries
South Africa's schools are under government pressure to provide equal opportunities to white and black children, but the families of children from former black townships often cannot afford the high school fees. Bishops has established a fund to provide bursaries for disadvantaged pupils. Income generated from the Investec relationship will feed into this fund. "There are many talented boys who would thrive in an environment like Bishops," says Grant Nupen, principal at Bishops. "This is one way in which we can provide and expand such opportunities."
Investec was chosen following a tender process involving four other banks. Barr says Investec plans to speak to other public schools. "This is an opportunity for us to move into the affluent market ? an area we have not penetrated to the full extent of our potential."