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ANZ writes off $274M worth of software

The ANZ bank has announced a $274 million pre-tax write-off of internally generated software assets after an internal review of its technology operations.

While it hasn’t made clear what software assets have been written off, it is confident that its current technology strategy which hinges around the development of technology hubs to support its super-regional strategy will allow it to keep a tight rein on costs in the coming year.

The bank, which today announced an after tax profit of $5.7 billion – up 6 per cent on the previous year, revealed that its total computer investment (including the write-off, which amounted to $220 million after tax) amounted to $1.38 billion for the year to the end of September. Included in that was $150 million spent on computer contractors; $106 million on data communications (which was an impressive 15 per cent lower than the year before); and $253 million on new software.

The bank also claimed that in the last 12 months transaction volumes in all business units had risen by between 5 per cent and 15 per cent, but it had held costs steady over the last six months. Costs rose 4 per cent for the year in total (compared to 11 per cent  and 15 per cent increases in the previous two years).

According to chief financial officer, Shane Elliott, that effectively pointed to the unit processing cost having dropped by between 5 and 15 per cent.


Earlier this month the bank unveiled a slew of new technology initiatives intended to further streamline bank processes.

Chief executive Mike Smith said that over the last five years there had been a fundamental transformation of ANZ which had allowed it to last year grow the business but keep costs flat. He particularly noted improvements in operational delivery, in the technology hubs and straight through processing.

Mr Smith said that by further leveraging the hubs which support its super regional strategy he expected to shave a further 2 per cent off the bank’s cost to income ratio by the end of 2014.

With regard to the ANZ’s New Zealand simplification programme -  which will lead to a single core banking system for NZ -  the bank noted that although there were costs incurred with that simplification programme it was ultimately expected to lead to lower technology and operational costs.


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