Accounting changes hit profits while BNZ and parent NAB bolster capital buffers
BNZ is taking a sizeable earnings knock as it rewrites how it treats software on its balance sheet, but the move is not expected to crimp its ability to lend to New Zealand home buyers and property investors.
The bank has warned that changes to its software capitalisation accounting are expected to reduce statutory profit for the six months to 31 March by $253 million and cut the value of capitalised software by $352 million, interest.co.nz reported.
BNZ says the shift reflects shorter useful lives for technology assets as systems are upgraded more frequently and emerging technologies, including artificial intelligence, make existing platforms obsolete faster.
Crucially for mortgage advisers and their clients, BNZ has stressed there is no impact on its regulatory capital because capitalised software balances are already deducted from its Common Equity Tier 1 (CET1) capital. In practical terms, that means BNZ’s ability to support home lending should be unchanged, even as reported profit steps down.
NAB lifts provisions and tightens tech treatment
Across the Tasman, BNZ’s parent National Australia Bank (NAB) is taking a similar approach. NAB has flagged first‑half 2026 credit impairment charges of A$706 million, largely due to higher forward‑looking provisions and industry overlays for sectors exposed to fuel supply and cost shocks linked to the Middle East conflict.
To reinforce its balance sheet, NAB is offering a discounted dividend reinvestment plan that could raise up to A$1.8 billion and add around 40 basis points to its CET1 ratio in the second half of 2026.
It is also narrowing what software can be capitalised, shortening asset lives and lifting the minimum project size, meaning more technology investment will flow straight through the profit and loss statement from later this year.
How BNZ’s tech reset will shape credit appetite
BNZ is bringing technology and risk costs forward while protecting core capital.
In the near term, higher expensed tech spend and provisions may pressure margins and keep management focused on credit quality, sharpening competition for low‑risk borrowers and scrutiny of deals that stretch borrowing capacity.
Over time, stronger capital buffers and improved digital platforms should support more consistent credit decisions and smoother application journeys for Kiwi borrowers, especially those with complex incomes facing tougher serviceability tests and shifting mortgage rates.
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