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Kiwibank books a $90 million impairment on software

Rob O'Neill | Sept. 5, 2017
Large SAP project - dubbed CoreMod - facing delays, cost overruns and now a "strategic review".

Brock said he wasn't sure how long phase three would take but estimated the end of 2017 for possible completion.

However, by February and after reporting its financial results for the half year ended December 2016, Brock was saying the cost of CoreMod would be "significantly more" than the $100 million flagged initally.

"This is a very expensive and long programme that will go over many years, and I don't intend to get into the detail of the costings around that," he told

In May last year, Kiwibank's general manager of IT emphasised that the project was implementing SAP "out of the box", bending the bank to fit SAP and not the other way around.

SAP's pre-configured banking software would run alongside and integrate with NZ Post's financial system, Unit4's Business World ERP suite. 

Phase two was scheduled for completion between May and July 2017, she said, comparing the project to "taking the engine out of the car while it is still going". However, the bank had so far avoided service interruptions.

Last year, NZ Post sold just over 37 per cent of Kiwibank to The New Zealand Superannuation Fund and the Accident Compensation Corporation. NZ Super Fund paid $263 million for a 25 per cent stake while ACC invested $231 million for a 22 per cent stake.

The $494 million deal valued Kiwibank at $1.05 billion. Around $90 million of that sale price was left with Kiwibank as additional working capital.

Kiwibank is no longer subject to the Official Information Act as a result of that transaction.



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