CBA cashes in Visa windfall to pay down software assets
19 December 2016 | 9310 views | 0
Commonwealth Bank of Australia is selling its remaining stake in Visa Inc for $439 million and using the windfall to write off $275 million in software spending on digital and direct banking channels.
CBA's sale of its remaining 49% stake in Visa results in a $278m after-tax gain, effectively wiping out a $275 million above-the-line hit in its forthcoming 2016 results statement through a "one-off acceleration of amortisation on certain capitalised software assets".
CBA currently carries $2.2 billion of capitalised software assets on its books.
The bank says the decision to realise the software spend reflects "the rapidly changing technology environment".
It follows in the footsteps of Australia's other big four banks, which have collectively written down billions of dollars in capitalised software assets, effectively removing an ongoing red-line expense on out-of-date technology.