MILAN, Feb 29 (Reuters) - Poste Italiane reported on Thursday a larger than expected yearly increase of 60% in fourth-quarter operating profit as financial services drove group revenues higher, and said it would boost dividend payments by more than a fifth.

The Italian post office, established in 1862 soon after the country's unification, has expanded beyond the traditional mail and parcel business to provide services from insurance to payments and mobile subscriptions.

The sale of all or part of the Italian Treasury's 29.3% direct stake in Poste is a key plank of the Rome government's privatisation plans to tame the world's fourth-largest debt pile in relation to domestic output.

Poste's financial division saw a 15% yearly rise in revenues in the fourth quarter as higher interest rates drove income from the gap in lending rates and deposit costs up 7.7%, while fees earned on the sale of investment products jumped 34.5%.

Overall earnings before interest and tax came in at 515 million euros ($558 million) in the three months through December, above an analyst consensus forecast of 504 million euro compiled by the company.

Revenues rose 4% annually to 3.19 billion euros in the fourth quarter, versus a 3.13 billion analyst average forecast.

Poste said it would pay 1 billion euros in cash dividends, an increase of 23% over 2022.

Shares in Poste, which is set to unveil a new business plan next month, rose nearly 3% in early trade. ($1=0.9230 euros) (Reporting by Valentina Za; Editing by Kim Coghill and Clarence Fernandez)