Banks’ software investment rises 55% to N120bn

The investment of 10 Nigerian Deposit Money Banks in software, which has accrued over the years, reached N120bn as of December 31, 2018, investigation has shown.

This investment grew by 55 per cent in two years from the N77.35bn the banks collectively reported in their financial report ended December 31, 2016.

The software is regarded as intangible assets and generates economic benefits for the financial institutions for more than three years before upgrade or change is required.

The financial institutions use the technology to facilitate and secure their operations.

The banks surveyed were First City Monument Bank Limited, Guaranty Trust Bank Plc, Sterling Bank Plc, Zenith Bank Plc, United Bank for Africa Plc and First Bank of Nigeria Plc.

Others were Wema Bank Plc, Union Bank Plc, Unity Bank Plc and Jaiz Bank Plc.

Experts noted that software, which forms a critical asset of the financial institutions to carry out transactions and protect customers’ funds, is usually upgraded every four or five years.

An analysis of the full- year audited annual reports of the banks showed that the software assets of First Bank had reached N29.36bn in 2018, from the N18.82bn reported at the end of the 2016 financial year.

This amount represents a 56 percent increase in software investment over the two years under review.

Findings showed that as of December 2018, FCMB had spent N9.95m on computer software developed within and sourced from outside the country as against N6.94m invested as of December 31, 2016.

This investment grew by 43 per cent in two years, analysis of the financial reports indicated.

To drive digital banking services, UBA software assets expanded by 21 per cent to reach N20.09bn as of the end of 2018 compared with N16.59bn in the corresponding period in 2016.

GTB’s investment in software development and procurement was N19.8bn as of the end of 2018, growing by 56 per cent compared to N12.67bn in the same period of 2016.

Sterling Bank’s software assets value grew by 6.5 per cent from N3.87bn investment as of December 2016 to N4.12bn in the corresponding period 2018.

Wema Bank, which had invested N2.92bn in the procurement of software as of December 2016, reported a growth of 44 per cent in software assets (N4.2bn) within the two years under review.

According to Zenith Bank’s 2018 full-year financial statement, N28.91bn had so far been invested in procuring software in the period as against N11.99bn in 2016, rising by 141 per cent.

The Union Bank’s software purchase increased by 90 per cent from N6.69bn reported in 2016 to N12.74bn in 2018.

For Jaiz Bank, investment in software, which reached N563.2m as of 2016, grew by 22 per cent to N688m as of 2018.

Analysis of the reports indicated that the investment of Unity Bank in software reached N80.87m at the end of 2018, dropping by 97 per cent from N3.22bn in the two years under review.