Absa writes off another R200-million in software

Absa Group has impaired a further R200-million in software assets in the six months to 30 June 2026, five months after a R2.4-billion write-down that the bank blamed on a strategy rethink and faster-than-expected technology obsolescence.

The latest charge, disclosed in interim results published on Tuesday, is almost three times the R74-million Absa impaired in the matching period last year. As with the much larger FY2025 write-off, the largest share of it originates in head office.

Absa said it had impaired certain software assets for which the value in use is determined to be zero, mainly derived from head office.

The recurrence complicates the picture Absa painted in March, when the R2.4-billion charge was presented as the consequence of a revision of group strategy that shifted investment priorities.

Head office, treasury and other operations absorbed R1.1-billion of that write-off, followed by personal and private banking at R611-million, corporate and investment banking at R559-million, Africa regions at R63-million, and business banking at R43-million. The full-year figure was more than 13 times the R179-million written off a year earlier.

Absa group chief information and technology officer Johnson Idesoh told TechCentral in March that AI was accelerating software obsolescence but was only one part of a broader acceleration in technology cycles across platforms, cloud, data and cybersecurity. “Absa is not pulling back on technology investment,” he said.

Speaking on TechCentral’s Meet the CIO podcast in May, Idesoh made it clear the write-down was not a single failed project. Asked whether one large asset sat behind the number, he said well over 100 separate small assets made up the total.

He also described a structural shift away from owning software towards consuming it as a service – which reduces what a bank capitalises to begin with.

The interim numbers show no let-up in spending. Total IT spend, including staff, amortisation and depreciation, rose 7% to R8.78-billion in the first half, or 28% of the group’s R31.4-billion operating expense base.

Idesoh told TechCentral in March that Absa spent R16.7-billion on IT, including staff costs, in FY2025; the interim figure , which also captures amortisation and depreciation, is running ahead of half that. He said in May that technology accounts for roughly a quarter of Absa’s operating expenditure each year. The interim disclosure puts it slightly higher, at 28%.

Within non-staff costs, which grew 3% to R13.1-billion, IT costs rose 6% on what Absa described as continued investment in new digital capabilities including cybersecurity, cloud and data. Professional fees climbed 7%, which the bank attributed to continued investment in technology initiatives.

At the same time, the asset base those write-offs are eating into keeps shrinking. Amortisation of intangible assets fell 6% in the period, reflecting an 11% decline in goodwill and intangible assets to R14.2-billion from R16-billion a year earlier.