Big four bank Absa has cut its IT expenses by 10% in the first half of the year, as a result of its "relationship" with Barclays.
Absa, 55.5%-owned by the UK bank, spent a total of R2.6 billion on IT, a figure that was flat year-on-year. However, in the six months to June, its business-as-usual IT running costs dropped 10%.
The bank says its relationship with Barclays allows it to run IT "more efficiently", although total IT spend is still about 20% of its overall costs. A spokesman says it will work closely with the Barclays teams in the UK and the US to accelerate product and customer service innovation.
"Increasing our alignment with Barclays has allowed us to launch innovations such as our banking app, Pingit and tap 'n go cards, at a low cost."
Group CEO Maria Ramos says the group made a number of undertakings to the market for 2013 that it has delivered on. "We said we would focus on efficiency. Our well-contained cost base in the first half of 2013 demonstrates our sustainable efficiency drive."
Absa says there has been an increase in professional fees as it implements a number of projects, including Barclays.net, the revamp of its bancassurance offer and making its branches paperless.
In June, Absa unveiled its first paperless branch and, by the end of the year, it will have rolled out 35 paperless outlets in SA and 25 in the rest of Africa by year-end. It also plans to invest R1.2 billion by 2015 to refresh its branch network and will also strengthen its ATM network in South Africa, where it has almost 10 000 ATMs.
Absa's professional fees more than doubled to R578 million, due to project delivery including its branch transformation, increased regulatory requirements and costs of R49 million relating to the Barclays Africa transaction.
The bank recently acquired Barclays' operations in Africa, as well as its African regional office in SA, which will be merged with Absa's Africa operations in an R18.2 billion deal.
It reported moderate revenue growth of 3% to R23.8 billion in the first half of the year, although headline earnings gained 8% to R4.66 billion.
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