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.
Small assets
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 set out three drivers on Meet the CIO:
- The first was the shift in group strategy, with Absa now running three pan-African business units, which he said forced a reassessment of what the bank carried on its books.
- The second was regulation, which had moved on in areas where Absa still held intangible assets.
- The third was the pace of technological change itself.
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.
Read: Absa impairs R2.4-billion in software after strategy rethink
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. Absa is spending more on technology each period while carrying less of it on the balance sheet.
Software was the largest single component of a R355-million “other impairments” charge for the half, down from R769-million a year ago. The balance included R155-million against property and equipment, of which R33-million was computer equipment and R62-million leasehold property. Absa said those charges were in line with its property consolidation plan.
Watch: Absa’s Johnson Idesoh on AI, cyber and the future of banking
Absa’s technology disclosure remains focused on the unglamorous work of estate management: simplifying architecture, moving to cloud-native platforms and retiring legacy systems. Idesoh has argued that the constraint is not the hardware – 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 R12.8-billion in the six months, with diluted headline earnings per share up 7% to 1 517.1c and an interim dividend of 850c declared, 8% higher than a year ago. Return on equity improved to 15% from 14.8%. — © 2026 NewsCentral Media
