Standard Bank's roll-out of Microsoft operating systems across its entire network has resulted in hardware and software cost increases, which are in line with expectations, says the bank's COO Alewyn Burger.
Burger was responding to questions following the release of Standard Bank's interim results for the period ended 30 June.
According to the results, Standard Bank's operating expenses increased by 16%, with staff costs up 14% and other operating expenses up 20%. "With total income growth of 21% exceeding cost growth across the group's businesses, the group's normalised cost-to-income ratio improved from 56.4% to 54.2%," the results statement says.
Standard Bank's results did not detail the exact rise in these costs.
Burger says as Standard Bank continues to scale up its operations inside and outside of SA, with the consequent investment in new talent and infrastructure, costs are bound to increase.
"The higher IT fees resulted from investment in human resource-related systems, trading systems implementation and the growth in software and hardware capacity, maintenance and licence expenses," he says.
Budget forecasts
Burger says these expenses are in line with expectations and budget forecasts, and are seen as a natural result of Standard Bank's expansion.
The bank has stated it is seeking to make several acquisitions in the next four years. These acquisitions and growth opportunities include the pending take over of the Argentinean bank BankBoston, West African expansion and the recent opening of an office in Angola.
"Investment in IT infrastructure is an imperative to ensure the sustainability and profitability of recent acquisitions and of organic growth," Burger says.
He says Standard Bank has invested heavily in its electronic banking infrastructure to expand reach and add convenient and secure banking to its customer base.
The bank's results also state expenses increased due to professional fees relating to its preparation for the Basel II international banking accord and the National Credit Act.
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