BNZ says changes to its software capitalisation accounting will reduce half-year profit by $253 million

BNZ says changes to the accounting process relating to the bank's software capitalisation policy will reduce half-year profit by $253 million.

BNZ says the timeframe in which software is expected to generate economic benefits is shortening.

"These changes are expected to better align BNZ (and parent - National Australia Bank Group’s) accounting policies with a rapidly evolving technology environment with more frequent enhancements and faster obsolescence, including from increased AI adoption," BNZ says.

Software capitalisation is an accounting practice that treats the costs of developing, or buying, software as a long-term asset on a company's balance sheet, instead of an immediate expense on its income statement. This allows companies to spread the software's cost over its life via amortisation, increasing short-term profitability.

"The change will be applied to both current and future software balances and is expected to reduce BNZ’s capitalised software balance at 31 March 2026 by NZ$352 million and BNZ’s statutory profit for the six months ended 31 March 2026 by NZ$253 million (post tax)."

"There is no impact on BNZ’s [regulatory] capital given capitalised software balances are already deducted from Common Equity Tier One capital," BNZ says.

BNZ's due to report its financial results for the six months to March 31 on May. For its March half-year last year BNZ posted net profit after tax of $795 million.