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.