Judo’s tenfold expansion plan
There’s no time like now for Joseph Healy and David Hornery’s capital-munching SME lender Judo Bank to put out its hand out for an extra $400m, putting the start-up close to unicorn status.
The liquidity pool is deep, and Judo has established a track record of meeting and beating (with apologies to Scott Morrison) its targets. With Judo established on the eastern seaboard and pumping out at least $50m in new lending a week, the co-founders have switched their thinking to the longer term.
The five-year plan, developed 18 months ago, budgets for a near-tenfold expansion in the loan book from $1.1bn to $10bn-$11bn. Momentum is building, and the pipeline boasts well over $1bn in lending opportunities.
The major banks are mostly dismissive of Judo’s ambitions, saying its growth has mainly come from their workout areas where they try with varying degrees of success to nurse comatosed customers back to sound financial health.
Hornery’s response is: “Well, they would say that, wouldn’t they?”
The reason the two ex-National Australia Bank business bankers brought Judo to life was to bring back the lost art of relationship banking. They espouse the “four Cs” of SME banking — the character of management, the cashflow of the business, the capital in the business in all its forms, and the collateral available to secure a loan.
“For the majors, it’s mostly about collateral; they’re very thin on the relationship side,” Hornery says dismissively.
While a ten-fold increase in the loan book by 2023 looks daunting, the pathway is clear.
By mid-2020, internal numbers forecast $2bn in loans, rising to $4bn by the end of 2020.
Judo Bank reaches $1 billion in deposits and lends 95% of it back to small businesses
Heard of Judo Bank? Well, if you have or if you haven’t, it’s a name that you’ll be hearing more and more about.
Yesterday, Judo Bank, a business-focused challenger bank that only launched (as a bank) in April last year, announced they’d hit $1 billion in term deposits - that’s only nine months since they became an Authorised Deposit-Taking Institution (ADI).
But that’s not the only thing turning heads.
Judo Bank’s term deposit has some of the highest interest rates on Mozo’s database, with a range of terms from six months to five year.
Plus, the bank is also supporting small Aussie businesses by lending 95% of deposits it’s received to SMEs, instead of favouring home loans like the big banks.