ANZ puts brakes on IT merger

ANZ National's plan to move to a single system to process ANZ and National Bank customer accounts has hit a stumbling block.

Sources say a business case revealed the cost of the project would be "significantly higher" than the expected $200 million and concerns about the economic climate had also prompted ANZ National executives to order a re-think.

A common information technology system might mean ANZ and National bank customers could carry out their banking at branches of either bank.

Massey University head of banking David Tripe has speculated the project could be a step towards abandoning one of the two brands.

ANZ National announced in August it was considering consolidating account processing on one of two systems; Hogan - used by ANZ, or Systematics - used by The National Bank.

Spokeswoman Virginia Stracey-Clitherow says work on creating a common system is still going ahead, but the bank "will have to take a different route than we originally thought".

"Large, complex IT projects of this nature often require a flexible approach, so we're not necessarily surprised at this outcome," she says. "Cost is naturally an important part of the evaluation process. However, it is by no means the only consideration."

A source said ANZ National had spent "tens of millions of dollars" on the business case, put together by a team of 68 staff.

"This is a large and complex project spanning one of New Zealand's largest organisations.

"This has required the expert input from a number of people in many different parts of our organisation," Ms Stracey-Clitherow says.

The bank is now reviewing its options "with a view to meeting the immediate needs of the business while we build on what we have achieved to date to create a core systems roadmap for New Zealand and alignment with our wider strategic goals," she says.

ANZ National has refused to comment on whether a single system would lead to job losses or result in the consolidation of its branch networks, but has said it has the potential to benefit the bank and customers "through improved efficiencies and costs relating to processing and service times".

Ms Stracey-Clitherow says the ANZ and National bank brands would continue to operate separately.

The bank last year announced a series of cost-cutting measures, including outsourcing 500 jobs to India, cutting 200 ANZ branch staff and making 200 management roles redundant.

- © Fairfax NZ News