CBA software review prompts bank to sell stake in Visa

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Speeds up writedown of software.

The Commonwealth Bank has sold its remaining stake in payments company Visa for $439 million after undertaking an internal review of its software assets that prompted it to reduce the value of the technology faster than it had planned.

CBA software review prompts bank to sell stake in Visa

The bank today revealed a recent review of digital and direct banking capitalised software assets, instigated by a "rapidly changing technology environment", had resulted in its decision to bring forward their amortisation to a value of $275 million after tax.

The sale of its remaining 49 percent stake in Visa - for an after tax profit of $278 million - offsets the software writedown.

Westpac's move to accelerate amortisation of its own software assets in November last year saw its capitalised software balance drop by $505 million pre-tax in its last financial year.

In May this year, similar moves by ANZ Bank resulted in an accelerated amortisation charge of $556 million, while in August insurer IAG took a $198 million pre-tax hit to its full-year results after speeding up the amortisation and impairment of its capitalised software assets.

CBA, and Australia's other major banks, gained stakes in Visa as part of the company's US$18 billion IPO on the New York Stock Exchange in 2008.

The bank sold 51 percent of its stake in Visa in the same year for $355 million.  

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