National Australia Bank is to write down $297 million in software expenses as the promised benefits of some deployments failed to materialise amid rising costs.
NAB levied the impairment charge following an internal review of its sprawling technology overhaul.
Write offs were directed to areas "where the benefits associated with the software were substantially reduced from what had originally been anticipated, the costs of development are in excess of expectations, or there is uncertainty when the technology capability will be deployed".
NAB is about halfway through a major technology refresh, rolling out a new core platform and upgrading and building new networks, data centres, and software.
A substantial element of the impairment charge, $106 million, is related to a mortgage origination platform developed for its UBank subsidiary as part of the bank's NextGen technology transformation strategy. The charge equates to 10% of the Nextgen spend> NAB is keen to stress that it is not writing off any of the costs associated with its oracle-based core banking upgrade.
Separately, local rival Bank of Queensland has handed a five-year IT outsourcing contract to long-standing partner HP. Under the terms of the deal, HP will be responsible for service desk, platform and application support, software engineering, technical solution analysis, testing services, and project solution design and architecture for the bank.