South Africa Absa bank splurges on IT
Absa forked out R600m more on IT in its 2010 financial year than it did in 2009. The money was spent replacing old IT systems and aligning itself with international banking regulations.
The group’s total capital and operational spend on IT jumped from R4,4bn to R5bn in the same period, with IT staff costs rising from R835m to R1bn. Amortisation and depreciation of intangible assets rose from R777m to R833m.
The company released its annual results for the year ended 31 December 2010 on Tuesday, revealing IT spending increased 19% year on year.
The investment forms part of the bank’s plan to plough R8bn into technology systems and upgrades over three years. Absa announced the spending plan at its interim results presentation in August last year.
The investments are being made to replace legacy systems and align the bank with Basel II — international regulations governing the management of risk. Among other things, Basel II requires an increased focus on document management and disaster recovery technologies.
Absa has also used new technology investment to expand its offerings elsewhere in Africa.