Kiwibank's IT work-in-progress proves costly
It reported a net profit for the year to June 30 of $58 million. That included an after-tax $65m impairment charge for work on CoreMod – work that was intended to modernise Kiwibank’s core banking system.
Chief executive Paul Brock said the value of the work so far was being assessed because the way customers interacted with the bank was changing “almost as rapidly as the technology required to support their increasing preference for digital banking experiences”.
Asked whether that meant that CoreMod could be out-of-date before it was complete, a spokesman said the bank had paused to assess where to from here.
Brock said while this review was conducted, a decision has been made to impair the value of the work in progress, which currently sits on the balance sheet as an intangible asset.
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