Absa Group reported a R2.4-billion write-down of software assets, a figure more than thirteen times larger than the R179-million impairment recorded the previous year, according to its annual financial statements released Tuesday.
The impairments, stemming from a revised group strategy and accelerating technological obsolescence, were distributed across Absa’s operations. Head office, treasury, and other operations absorbed the largest portion at R1.1-billion, followed by personal and private banking (R611-million), corporate and investment banking (R559-million), Africa regions (R63-million), and business banking (R43-million). Absa determined the recoverable amount of the affected software to be zero.
The bank stated the strategic shift led to changes in investment priorities. “The group’s overall strategy was revised, resulting in changes in the prioritisation of strategic investment,” Absa said in its results for the year ended December 31, 2025. “the pace of technological change continues to escalate, resulting in faster software obsolescence than previously experienced.”
The write-downs contributed to a significant increase in total impairments, rising to R3.2-billion from R914-million in 2024. An additional R629-million in impairments related to property and equipment, linked to the group’s property consolidation plan, comprised a substantial part of the increase.
Despite adding R3.9-billion in latest software during the year, the carrying value of Absa’s computer software development costs decreased to R13.7-billion from R15.2-billion. Amortization accounted for R2.8-billion of the decline, with the R2.4-billion impairment further reducing the value of investments. Software assets currently under construction totaled R4.5-billion at year-end.
Absa’s IT spending growth slowed considerably, increasing by 3.4% to R7.1-billion in the 2025 financial year, compared to a 13% increase in the prior year. This deceleration positions Absa at the lower end of IT spending growth among South Africa’s major banks. Capitec led the sector with a 32% increase to R2.5-billion, driven by cloud computing costs. FirstRand’s IT costs rose 9% to R10.9-billion, Nedbank’s grew 7% to R7.4-billion, and Standard Bank increased spending by 2% to R12.7-billion, remaining the largest IT spender in the sector.
Absa did not provide a detailed breakdown of its IT spending in its financial statements. However, the combination of slower spending growth and the substantial software write-off suggests a reassessment of its technology portfolio following the strategic review.
The results were released under the leadership of CEO Kenny Fihla, appointed in June 2025, who is overseeing the implementation of the group’s revised strategy. Absa reported headline earnings growth of 12.25% to R24.8-billion for the period, with total income rising 5.2% to R115.7-billion.
