The first bank to list on the ASX in 30 years has successfully made its journey to the milestone moment today. Judo Bank, also known as Judo Capital Holdings Ltd (ASX: JDO), has cemented itself in history on Monday as the small and medium-sized enterprise (SME) business bank made its debut in the public markets.
Around midday, shares in the freshest bank on the ASX are fetching a $2.16 price tag, up 2.86%. Miraculously, in the space of 5 years, Judo Bank has gone from a PowerPoint presentation to a more than $2.3 billion company in its current state.
Let's put Judo under the microscope and get a sense of where it comes from and how it is different from the big four it hopes to challenge.
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Judo Bank's path to the ASX
Since its inception in October 2016, Judo Bank has been on a mission to serve SMEs and be the most trusted SME business bank in Australia. Those ambitions have been shared among an array of key people within the company, not the least of which include co-founders Joseph Healy and David Horney, among other former National Australia Bank Ltd. (ASX: NAB) executives.
Judo quickly gained its full banking licence in April 2019, less than three years after setting the wheels into motion. From there, the pace of growth has been exceptional, with the bank catering to SMEs that have been unable to secure lending through the traditional providers.
In turn, the loan book of Judo has flourished, surpassing $4.15 billion of aggregate funding to the SME sector as of 30 September 2021. The business bank experienced a 97% increase in its lending book during FY21 alone. Having grown up from its bootstrapping days, the management of Judo Bank felt it was time for it to join the big leagues on the ASX.
Getting set for the ASX involved Judo raising $657 million through its initial public offering (IPO). The raising attracted interest from a range of institutional and retail investors at an offer price of $2.10 per share. Incredibly, this implied a valuation of $2.3 billion after achieving 'unicorn' status only 18 months earlier.
As we now know, the $657 million capital raising was successful, along with Judo Bank's ASX debut today.
How does is it different to the big four?
Judo Bank and its management pride themselves on doing banking "as it should be", in the words of CEO Joseph Healy. This is a little ambiguous so let's elaborate on what that means exactly.
The big bank contender has its sights set on the SME market. A place where management believes the big banks have neglected, with cookie-cutter financing and a high barrier to credit for many businesses, unless backed by some form of real estate as security.
Instead, the newest banking kid on the block wants to take a business-first approach. Essentially, dealing directly with SME customers with dedicated relationship managers to understand the business. By doing this, Judo can offer tailored financial solutions for its customers.
Since day one, Judo Bank's purpose has been clear, to be Australia's most trusted SME business bank by bringing back the craft of SME relationship banking.
Judo Bank Co-founder and CEO, Joseph Healy
Finally, the newly ASX-listed Judo Bank boasts a 'legacy-free' business model. Instead, opting for cloud-based technology to enable its relationship-centric lending model.
