The Commonwealth Bank (ASX:CBA) may have been touting the benefits of its investment in ICT over the past year, but financial figures released today show that these gains have come at a cost – some $1.029 billion worth of pro forma expenditure for the year to 30 June 2010.
In the bank’s profit statement, released to the ASX, the CBA said it had spent some $209 million on application maintenance and development, an 11 per cent increase year on year.
Data processing, the highest area of expenditure, came in at a cost of $227 million, up 12 per cent year on year, while its desktops costs were $141 million, down one per cent.
Communications costs were $199 million, up seven per cent, amortisation of software assets cost the bank $178 million, up a sizable 35 per cent, while IT equipment depreciation was $75 million, up 10 per cent.
The bank also noted that the capitalised software costs (net of amortisation) totalled $950 million as at 30 June 2010. In the half year to December 2009 this was $799 million, an increase on the half year to June 2009 at $673 million.
In a statement to the ASX the bank said its four year Core Banking Modernisation initiative remained on schedule at its half way stage and had achieved a number of key milestones during the past year, including migration of all customer information and term deposits to the new system.
In February the bank also flagged that its core modernisation project remained on schedule, with 20 million customer records having then been migrated to the CBA’s new systems.
Speaking at the bank’s 2010 half year results presentation, chief executive, Ralph Norris, said the modernisation - then half way through its four year schedule - had already resulted in "quantum improvements" for customer service and efficiency.
The bank’s full year to 30 June 2010 results include a statutory net profit after tax of $5.664 billion, up 20 per cent year on year.
In December the bank also detailed the inner workings of its IT to Computerworld Australia.