Judo set to take on big four after securing banking licence

Almost five years after leaving NAB, Joseph Healy has secured a banking licence from APRA.

Judo co-founders Joseph Healy and David Hornery. Picture: Britta Campion

Almost five years after Andrew Thorburn showed him the door at National Australia Bank, Joseph Healy has secured a banking licence from the prudential regulator for his start-up business lender Judo.

For the former head of NAB’s business bank, the task of transitioning his start-up Judo Capital to what is now known as Judo Bank was painstaking — the Australian Prudential Regulation Authority doesn’t lightly confer the right to take customer deposits.

“And neither should it, but you do tend to come out of the process feeling like you’ve been subjected to extensive internal and external examination,” Mr Healy joked to The Australian.

It’s no secret that the four major banks are dominant in Australia, which is why each new banking licence is greeted as a cause for celebration by others who are trying to eke out a living in the same neighbourhood.

The start-up digital banks stacked it on yesterday.

Robert Bell, chief executive of 86 400 (so-called because it’s the number of seconds in a day) said more banks meant better choice.

Not missing an opportunity to take a poke at a common enemy, Mr Bell said Australians had long-deserved better products and services than those offered by the big four.

Oh, and in case you weren’t aware, 86 400’s application for a full licence was “progressing well”, with an announcement expected in the not-too-distant future.

Fellow mobile bank Xinja rocked up soon after, with founder, chief executive and former NAB alumni Eric Wilson passing on his congratulations to Judo.

Oh, and by the way, Xinja was expecting its licence by mid-year.

Mr Healy, for his part, has carefully mapped out Judo’s domain.

Unlike 86 400 and Xinja with their fancy mobile apps, Judo is definitely not a fintech company.

It might use the latest technology, but it’s a specialist lender to small and medium-sized businesses that uses a back-to-the-future relationship banking model.

Judo aims to fill a niche that its founder firmly believes NAB, the nation’s biggest business bank, has vacated.

“They’ve been centralising, standardising and dehumanising,” Mr Healy said.

“You can spend hours on the phone to a call centre, speaking to someone who has no idea about your business.”

Judo had about 100 staff and is well-ensconced in its home city of Melbourne.

In the next few months, it will round out its presence in Sydney and Brisbane, with 20 or so people in each location.

Armed with a banking licence, it will test-run an online deposit product with the family and friends of staff within a couple of weeks.

Judo then plans to start raising funds from the wholesale market.

The company is currently undertaking a second capital raising worth at least $240 million, which it expects to close at the end of next month.

Last year Judo raised $140m — the largest pre-revenue raising in Australia.

The size of the loan book is a tick under $200m, with 90 per cent of the customers having switched from one of the big four. “We could have never have forecast the (favourable) environment that we’re now in,” Mr Healy said.