A challenger bank has been granted a full banking licence by the prudential regulator, which it has said would bolster its capacity to offer finance alternative to brokers and their customers.
The Australian Prudential Regulation Authority (APRA) has announced that it has granted SME lender Judo Bank (formerly Judo Capital) a licence to operate as an authorised deposit-taking institution (ADI) without restrictions under the Banking Act 1959.
Following APRA’s announcement, Judo chairman Peter Hodgson commented: “We are delighted to be granted an unrestricted banking licence, helping to solidify our position as Australia’s first fully licensed challenger bank dedicated to small and medium-sized business lending.
“To achieve our full licence in such a tight timeframe, we worked closely with APRA to meet the strict conditions necessary for a licensed bank, including the strength of our business model, and governance policies and principles – a process that involved substantial work by the team since we first applied in May 2018.
“On behalf of our investors and Judo team across Melbourne, Sydney and Brisbane, we are delighted to have been granted this full banking licence, following new legislation that has opened up the industry to much needed competition.”
Mr Hodgson said that Judo would be launching deposit products, starting out with term deposits and notice accounts for business, consumers, SMSF and wholesale depositors.
“We have been thrilled with the support we have received from the business community since we launched Judo in April 2018,” he added.
“The ability to now offer term deposits and, accordingly, to change our name to Judo Bank will help drive growth, and provides an opportunity for businesses and the broader community to support business funding at competitive rates.”
Mr Hodgson concluded: “As Australia’s first dedicated business bank, we want to be champions for small and medium-sized businesses – the most dynamic sector of the Australian economy but one that has been often ignored or taken for granted for too long.
“I want to thank our customers, brokers, investors and strategic partners for the confidence they have shown in Judo and our team.”
Speaking to The Adviser, Judo’s managing director of third party, George Obeid, highlighted the bank’s commitment to providing brokers and their clients with access to alternative finance products via a simplified lending platform.
“We’re a bank that’s pro-lending,” Mr Obeid said. “We like to say yes to Aussie businesses; that’s why we’re making it easier for brokers and SMEs to get the funding they need to do business.”
He continued: “For brokers in particular, we want to make sure that we’re fast and nimble, and provide the right outcomes for them and their customers and apply a common sense lens that puts the ‘four Cs’ in the right order – character comes first, followed by capacity, capital, and then collateral.”
“This is an exciting time for Judo and the Australian business community, introducing more competition.”
Judo Bank is the latest neobank to receive a banking licence, with Volt Bank receiving a licence in May 2018, and Xinja Bank authorised to operate as a restricted ADI in December 2018.
86 400 has also applied for an ADI licence, which it expects to receive in the coming months.
CEO of 86 400 Robert Bell congratulated Judo on their receipt of the banking licence.
“Congratulations to the team at Judo for passing such a significant milestone. More banks means better choice and that’s great news for Australians, who have long deserved better products and services than those offered by the big four banks,” he said.
“86 400’s full licence application is progressing well, and we look forward to making an announcement of our own in the not-too-distant future.”
CEO of Xinja Bank Eric Wilson also congratulated Judo: “We are delighted for the whole team at Judo Bank that they have passed this well-deserved milestone.
“It’s great to see more choice for businesses in Australia with a new business bank.”
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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