Absa impaired a further R200m of software assets in the six months to 30 June 2026, according to interim results published on Tuesday. That is almost three times the R74m it wrote off in the matching period last year. It also comes five months after a R2.4bn write-down the bank put down to a revision of group strategy and faster-than-expected technology obsolescence.
Where it comes from
As with the much larger charge, the biggest share originates in head office. Absa's own wording was that it had impaired certain software assets for which the value in use is determined to be zero, mainly derived from head office. That earlier charge broke down as head office, treasury and other operations absorbing R1.1bn, personal and private banking R611m, corporate and investment banking R559m, Africa regions R63m and business banking R43m. That full-year figure was more than 13 times the R179m written off the year before.
Not one failed project
Group chief information and technology officer Johnson Idesoh has already described the shape of the R2.4bn. Asked in May whether one large asset sat behind the number, he said well over 100 separate small assets made up the total. He set out three drivers: the shift to running three pan-African business units, which forced a reassessment of what the bank carried on its books; regulation moving on in areas where Absa still held intangible assets; and the pace of technological change itself. He also described a structural move away from owning software towards consuming it as a service, which reduces what a bank capitalises to begin with. "Absa is not pulling back on technology investment," he said in March.
Spending more, carrying less
Total IT spend, including staff, amortisation and depreciation, rose 7% to R8.78bn in the first half, or 28% of the group's R31.4bn operating expense base. Idesoh had put technology at roughly a quarter of yearly operating expenditure; the interim disclosure runs slightly higher. Within non-staff costs, which grew 3% to R13.1bn, IT costs rose 6% on continued investment in cybersecurity, cloud and data, while professional fees climbed 7% on technology initiatives.
The asset base those write-offs eat into keeps shrinking. Amortisation of intangible assets fell 6% in the period, reflecting an 11% decline in goodwill and intangible assets to R14.2bn from R16bn a year earlier. Software was the largest single component of a R355m other-impairments charge for the half, down from R769m a year ago; the balance included R155m against property and equipment, of which R33m was computer equipment and R62m leasehold property, in line with a property consolidation plan.
Idesoh has argued the constraint is not the hardware, since Absa still runs IBM z16 mainframes at Randburg and Samrand, but software written four decades ago that still carries the mental model of banking as it was then. The bank renewed partnerships with Amazon Web Services and Huawei to support the shift.
Group headline earnings rose 8% to R12.8bn for the half, and the interim dividend was lifted 8% to 850c.
