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Three-quarters of the lender’s loans were originated by brokers in FY22, according to Judo’s first results release since its IPO.
SME lender, Judo Capital Holdings Limited (Judo) has reported a 73 per cent increase in its lending portfolio in the financial year ending 30 June 2022, finishing the year with $6.1 billion in gross loans and advances.
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According to the lender, brokers sourced 74 per cent of new loans over the last year and lifted the broker share of the whole portfolio to 75 per cent.
The results, which are the first since the SME lender listed on the Australian stock exchange (ASX), exceeded its prospectus forecasts (which had forecast a lending portfolio of $6.0 billion by year end).
Judo CEO and co-founder, Joseph Healy stated that FY2022 had been “a transformative year for Judo”.
“We have continued to rapidly scale our operations, so more small and medium-sized businesses (SMEs) across the country have access to our unique relationship-led model and a bank that listens, learns and boldly backs their businesses,” Mr Healy stated.
Touching on its strategy for brokers moving forward, the SME lender told The Adviser that it plans on continuing its focus on partnering with “experienced commercial and asset finance brokers”.
It suggested that it aims to support brokers in addressing the “gap in SME lending”, estimating that “unmet demand for SME credit sat at around $120 billion”.
As such, Judo said it would continue to “invest in, and build out”, its broker value proposition to support its broker partners growth.
Furthermore, Judo plans to invest in training and development to develop insights, intel and analysis for brokers into the SME segment with “a view to unlock opportunities for SME businesses”.
Expansion into agriculture and health sectors
Judo also revealed that its growth trajectory will build on its expansion into regions and specialisations, such as agriculture and health.
Touching on the recently-launched offerings, Judo suggested that brokers had recognised the “genuine need for a Judo proposition into the agribusiness sector”.
This will be a key focus moving forward, according to Mr Healy, who commented: “As part of this process, this year we established specialist segments to service SME customers in the areas of agribusiness and health, recruiting the right bankers to establish and build our offering in FY23.”
The SME bank’s CEO concluded: “We have great momentum across the business and are making good progress in the delivery of our key priorities to grow, recruit and invest in technology.
“We are focused on achieving our key business metrics at scale. To build a scaled, sustainable bank, we are targeting a lending portfolio of between $15 billion and $20 billion, with a net interest margin that exceeds 3 per cent, a cost-to-income ratio approaching 30 per cent, and ROE [return on equity] in the low-to-mid-teens. We are well positioned to keep progressing towards and achieving these targets.
“It continues to be an exciting time for Judo,” he continued.
“We are committed to delivering our guidance and growth strategy, making sure our people are well supported in their roles, and that Australian SMEs continue to receive the premium service that they know and expect from Judo Bank.”
[RELATED: Brokers key to Judo’s push into health, agriculture]
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