CommBank's sub-prime woes offset by IT savings

in brief The Commonwealth Bank of Australia (CBA) has released its half-yearly results reporting that greater spending on its investments at large has been offset by a reduction in its IT costs.

CBA CEO Ralph Norris said the bank had incurred substantial costs as a result of investments affected by the US sub-prime crisis and added that a number of these unforeseen costs had been covered by savings from the bank's IT budget, as well as an increase in productivity.

"There have been some useful savings from the IT budget in this last half-year," a CBA spokesperson said. "The efficiency ratio -- which represents value of IT costs relative to the costs within the entire group -- is trending below 15 percent." The spokesperson said that the ratio represented an across the board figure for IT spending including software, hardware and labour.

Yesterday's figures come after it was reported late last year that the bank had switched to a multi-sourcing strategy for its outsourcing, seeking "greater contestability", and had excluded EDS from its application services contract -- a company which had maintained a relationship with the bank since 1997.