Kiwibank rethinks IT project after $90m write-off
Kiwibank's profits have taken a huge hit from the troubles it is having replacing its banking system with software provided by Germany's SAP.
The state-owned bank has written $90 million off the value of its investment in the information-technology project, which it has dubbed CoreMod.
As a result, its net profit for the year to the end of June slumped 55 per cent to $58m.
Chief executive Paul Brock indicated Kiwibank might look to other technology to meet some of its needs.
A strategic review was under way to "look at a number of options for how best to deliver a digital future for the bank", he said.
Brock appeared to blame false steps in its IT project on a change in customer preferences and technology that Kiwibank had not predicted.
"The way customers interact with Kiwibank is changing almost as rapidly as the technology required to support their increasing preference for digital banking experiences," he said in a statement.
"As a consequence, a review of the project underway to modernise Kiwibank's core banking system is being conducted to assess the value of some of the work completed so far," he said.
Not all of the work on CoreMod was a write-off, he indicated.
"The assets associated with the successful migration of our batch payments to an SAP solution are unaffected," he said.
Brock said Kiwibank's "underlying" profit fell $2m to $129m. That was "very pleasing" given "disruptions" such as the Kaikoura earthquake in November and regulatory changes, he said.
Brock is due to leave Kiwibank at the end of the year.