Judo Capital Holdings Limited (ASX: JDO), established in 2016, is an Australian neobank dedicated to supporting small and medium-sized enterprises (SMEs) with tailored financial solutions.
Known for its unique approach, Judo Bank offers business loans, lines of credit, equipment loans, and term deposits. The bank’s commitment to SMEs is evident through its innovative lending practices and significant investments, including a $1 billion lending milestone and substantial digital retail term deposits.
Judo Bank’s major divisions include business banking and personal term deposits, with notable projects like the SME Guarantee Scheme Loans. Headquartered in Melbourne, Judo Bank continues to challenge traditional banking norms by prioritising agility and customer-centric services.
During his address, CEO Chris Bayliss emphasised that Judo Bank’s competitive edge is anchored in its “blank piece of paper” approach—eschewing legacy products, sales cultures, and outdated technology.
This fresh start, he explained, has enabled the bank to build a customer value proposition that is tailored specifically for small and medium enterprises (SMEs). The bank’s model is said to be very difficult to replicate, underlining its ability to offer judgment-based lending, high-quality decision-making, and relationships that place SME customers first.
Judo’s strategy is segmented into three growth horizons: building, scaling, and optimising the bank. With the scaling phase largely behind them, the focus is shifting to optimisation. Key financial targets for FY25 were reiterated, including, Gross Loans and Advances (GLA), targeting $12.4–12.6 billion, reflecting strong lending growth supported by new regional investments.
Net Interest Margin (NIM) is expected to exit June 2025 at around 3% with improvements noted in the second half of the financial year. Profit Before Tax (PBT), the bank aims for 15% growth compared to FY24, laying the foundation for achieving an ROE in the low-to-mid teens at scale.
These ambitious targets are bolstered by initiatives across core business enhancements, new product development, and geographic expansion.
A large part of Judo Bank’s competitive advantage comes from its deliberate use of technology. The investor presentation highlighted the successful migration to enterprise-grade core solutions—a transformation underpinned by a modern, cloud-based technology platform. Key investments included Customer Digital Services, through platforms like Backbase and nCino that streamline lending and deposit origination.
Data and Risk Management, enhanced by the integration of Moody’s Credit Risk Engine and robust data platforms to empower informed decision-making. As well as Client Relationship Management, leveraging Salesforce to deliver actionable customer insights and create a seamless interface across multiple platforms.
The technology overhaul is set to deliver further operational efficiencies, improved risk modelling, and ultimately support a more scalable and resilient business.
Judo Bank’s commitment to employee engagement and a strong value-driven culture is integral to its strategy. The institution prides itself on Judgement-Based Lending, Employee Value Proposition and Industry Recognition.
Judgement-Based Lending involves empowering experienced bankers to make quick, high-quality credit decisions tailored to each SME’s unique profile. Employee Value Proposition in to do with initiatives like the Judo Belt Scheme, the bank incentivises collaboration over individual sales targets, thereby fostering teamwork and customer-centric results.
Industry Recognition requires continuous monitoring and measurement of employee engagement through the “JEDI” index ensures that workforce morale remains high—a key driver for sustainable growth. This culture not only differentiates the bank from its larger, legacy-bound competitors but also positions it as the employer of choice among SME business bankers.
The presentation conveyed confidence in Judo Bank’s trajectory toward industry-leading profitability. With operating leverage emerging strongly in the second half of the financial year, a combination of improved pricing strategies and continued TAM (total addressable market) expansion are set to deliver enhanced deposit funding and operational efficiencies.
Through enhanced deposit funding, the bank is set to diversify its funding sources with new savings accounts complementing its term deposit franchise. Lower cost pressures and targeted technology investments are expected to boost profit margins and drive operational scale.
Judo’s evolving funding stack—with deposits expected to represent approximately 75% of its at-scale funding—reinforces its commitment to sustainable growth and capital efficiency.
Closing the presentation, Chris Bayliss reaffirmed Judo Bank’s purpose to enhance the trust in the bank in the Australian market. With a clear strategic roadmap—from optimising core operations to embracing technology and nurturing a skilled workforce—the bank is well-positioned to challenge incumbents and capture the unmet lending needs of the SME market.
Investors and market participants will now be closely monitoring how these initiatives translate into performance results, as Judo Bank continues its journey toward becoming a true scale challenger and a benchmark for customer-centric banking in Australia.
Chifley Tower, 2 Chifley Square,
Sydney NSW 2000
1300 854 151
© 2023 KOSEC | Kodari Securities Pty Ltd | ABN 90 147 963 755 | FSG | Terms & Conditions | Disclaimer & Legal
© 2023 KOSEC | Kodari Securities Pty Ltd
ABN 90 147 963 755
KOSEC - Kodari Securities does not provide any investment advice, nor is anything mentioned an offer to sell, or a solicitation of an offer to buy any security or other instrument. Anything discussed is for informational purposes only and does not address the circumstances or needs of any particular individual or entity. Investing in the stock market is high risk. Under no circumstances should investments be based solely on the information provided. We do not guarantee the security or completeness of information on this website and are not held liable. Kodari Securities PTY Ltd trading as KOSEC is a corporate authorized representative (AFSL no.246638) which is regulated by the Australian securities and investment commission (ASIC).
