BNZ takes $78m hit on software

Parent bank's billion-dollar SAP project gets a $200m writedown

National Australia Bank has taken a huge hit on its Integrated Systems Implementation (ISI) project. The bank has written off A$200 million against the project, part of a A$409 million software asset writedown.

Its New Zealand subsidiary, the Bank of New Zealand, has worn NZ$78 million of the writedown.

Two years ago, the Australian Financial Review reported that NAB had spent upwards of A$1 billion on the SAP project, which has been rolled out through Australia, New Zealand and Europe. New Zealand was used as a testbed for the project, which embraces human resources, financials and procurement.

NAB disclosed a 20% drop in profit in its annual results, posted last week. Its European operations’ earnings fell by 33.3%, but the BNZ’s profit was up 6.6%.

NAB was also hit during the year by a rogue foreign exchange scandal, which cost it A$360 million.

As part of a management shake-up in September, NAB replaced its Australian chief information officer, Ian Crouch, with its executive general manager of financial services Australia, Ian MacDonald. NAB also lost its CIO in Europe.

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Tags banking

More about Australian Financial ReviewAustralian Financial ReviewBank of New ZealandBNZNABNational Australia BankSAP Australia

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