Bank of Queensland outlines millions in extra tech costs

Bank of Queensland said that an additional $41 million in technology-related costs and impairments will weigh on its profit numbers when it releases its full-year results later this month.

The bank said [pdf] it expects to recognise "technology costs" of around $14 million in relation to its "group-wide operating model review", and a $27 million write-down in the value of ME Bank's core banking system. BOQ bought ME Bank back in 2021.

“The review forms part of the group’s strategic simplification and digital transformation, focusing on addressing BOQ’s complex operating structure and operating costs," it said.

The specific write-downs are for "intangible assets" whose value is diminished by the bank's digital work.

In executing is strategy to become a more digitally enabled bank, BOQ stated it is focused “on simplifying its operating model and improving productivity.”

In addition to technology costs, BOQ said profit would be impacted by redundancy costs and property-related write-downs.

The bank also provided an update on its ME Bank integration program, which it said was “finalised" during the second half of the financial year.

BOQ stated its work fell in line with “guidance of $130-140 million".

However, it went on to say that “outside of the program, and on review of the updated group operating model and technology roadmap, additional decisions have been made to further integrate property and decommission legacy technology, resulting in impairments of $43 million ($30 million after-tax) in 2H23.”

The bank accelerated its digital transformation of ME and transitioned to a single core-banking platform for its retail banking operations, leading to “an impairment of the ME core banking intangible asset of $27 million”.  

BOQ will release its full year results on October 11.