In a boardroom that looks more like a data centre than a traditional finance office, the chief financial officer of Momentum Metropolitan Holdings lifted a slide that showed a single line moving up: software assets now sit at R239m. The figure, announced by the company, marks the latest increase in the intangible assets that sit on its balance sheet.
For investors and lenders, the rise matters because software assets are counted as part of a firm’s total assets, which in turn affect ratios such as debt-to-equity and return on assets. A larger asset base can improve a company’s borrowing capacity and may influence its credit rating, a factor that matters to anyone who relies on bank financing, including small and medium-size enterprises that source credit from the same institutions.
Momentum, best known for its life insurance and investment products, says the growth reflects ongoing investment in digital platforms that support policy administration, claims processing and customer engagement. According to the company, the increase is the result of both internal development work and the acquisition of specialised software licences over the past twelve months.
Under International Financial Reporting Standards (IFRS), software development costs can be capitalised, that is, recorded as an asset, once certain criteria are met, such as technical feasibility and the intention to use the software for commercial purposes. SARS provides guidance on how companies should treat these intangibles for tax purposes, and the rise in Momentum’s software assets suggests the firm believes it has met those thresholds.
The move mirrors a broader trend in South Africa’s financial services sector, where insurers and banks are increasingly turning to technology to stay competitive. While Momentum does not disclose how its software spend compares with peers, the sector as a whole has been allocating more capital to digital transformation, a shift that has been accelerated by the need to serve customers online during periods of load-shedding and pandemic-related restrictions.
For small business owners, the story offers a reminder that digital capability is becoming a core part of financial service providers’ value proposition. As larger firms embed more technology into their operations, they may be able to offer faster, more personalised services, a development that could raise the bar for SMEs seeking similar efficiencies.
Momentum’s balance sheet now shows software assets at R239m, up from the previous reporting period. The company has not broken down the exact amount of new development versus acquisitions, but it described the growth as “a strategic investment in our digital future”. The claim remains a company statement until independently verified by auditors.
Analysts will watch how the higher intangible asset base influences Momentum’s profitability and capital ratios in the next reporting cycle. If the software delivers the expected efficiency gains, the firm could see lower operating costs and higher margins, which would benefit shareholders and could translate into more stable pricing for policyholders.
Meanwhile, regulators such as the JSE will continue to monitor how listed companies disclose intangible assets, ensuring that investors receive a clear picture of the risks and opportunities tied to these non-physical resources.
For entrepreneurs looking to fund their own digital projects, Momentum’s experience underscores the importance of treating software development as a potential asset rather than a pure expense. The company’s approach may serve as a reference point when preparing financial statements or when discussing funding with banks that assess collateral based on total asset values.
As the financial services landscape becomes ever more technology-driven, the size of software asset balances will likely remain a useful barometer of where firms are heading. Momentum’s latest figure is a data point that signals a continued commitment to that direction.
Momentum’s computer software assets rose to R239 million in the year to 30 June, up from R225 million the previous year, spread across segments including Guardrisk and Momentum Health as well as group-level trade capture, treasury and risk-management systems, with no impairment required across any of the disclosed software assets in the 2026 financial year. Capitalising software development costs as an asset, rather than expensing them immediately, is standard accounting practice for systems expected to generate value over several years, though it also means a rising software asset balance can reflect either genuine platform investment or simply a larger technology budget being spent, a distinction only visible in the underlying capital expenditure detail rather than the headline number itself. Momentum Group’s own annual financial statements carry the full segment breakdown. For related coverage, see this site’s Markets and Finance coverage.
