The Commonwealth Bank’s investment spend for the six months ending 31 December grew to $681 million, up from $595 million in the first half of FY15 and $651 million in 2H15.
The percentage dedicated to risk and compliance grew compared to 1H15, “but we have not let that crowd out the investment in the future of the franchise,” group CEO Ian Narev said today during a results briefing for the bank’s first half.
The majority of the investment spend — 52 per cent — went to productivity and growth initiatives.
“Over the last six months we’ve continued to innovate on the Commonwealth Bank app, we’ve continued to innovate for our business banking customers, but we have also ensured that the technology-based innovation continues to extend right across our business,” the CEO said.
“In addition to the innovation that’s taken place within the Commonwealth Bank group over this period, we’ve continued our partnerships with what we consider to be some of the most innovative and interesting players outside the Commonwealth Bank group,” Narev said.
Among those investments in the half were an additional $10 million for the University of New South Wales’ Centre for Quantum Computation and Communication Technology, on top of an existing $5 million investment. Telstra is the centre’s other major private sector investor.
“We’ve had our technology team and our business teams continue to cooperate with banks and other players around the world on exploring the opportunities of the distributed ledger, the blockchain technology,” Narev added.
The CEO noted that the bank also joined the R3 partnership, which is exploring applications for the blockchain — the technology employed by the cryptocurrency Bitcoin for transaction processing. CBA last year helped stage a series of Sydney workshops to examine the potential of blockchain-based technology.
The bank also continued its cyber security partnership with the University of New South Wales, the CEO said.Read more: What makes ‘smart contracts’ smart?
“At the core of this innovation is the principle that we will continue to invest for the future,” Narev said.
“And despite the economic conditions that can cause turbulence in markets we are very committed to keep investing to make sure that the very competitive franchise that we have today remains as competitive in the future, where technology and productivity become even more important to our customers, even more important to our shareholders.”
IT expenses grew to $752 million in the half.
The bank said that the 20 per cent increase compared to 1H15 was driven by higher software amortisation, increased investment in risk and compliance projects, and a 1 per cent impact of the lower Australian dollar.
The bank announced a statutory net profit after tax of $4.6 billion for the half year, up 2 per cent on the prior comparative period.