Judo kicks in to retail deposits

George Lekakis Authorised deposit-taking institutions

Australia’s newest business lender, Judo Bank, is poised to make an impression in the retail deposits market with a line of sharply priced term products from Wednesday morning.

Judo co-founder and chief executive Joseph Healy confirmed to Banking Day on Monday that the banking newcomer would begin taking deposits from retail customers via its website this week.

“We’re focusing on the term deposit market and will be offering a complement of term products this week aimed at personal customers,” he said.

“Our term deposits will be available online from Wednesday and the pricing will be at or near the top of the industry rates tables.”

Healy refused to give precise rate information for each term product, saying that the pricing would be extremely competitive and market leading.

According to Canstar only a handful of institutions are still offering rates of better than 2 per cent over three, six, 12 and 24 months.

Illawarra Credit Union is currently among the market leaders across most terms and leads the way in the 12-month segment with a rate of 2.15 per cent.

It is followed by a string of customer owned institutions offering rates at or slightly above 2 per cent. They include Police Bank, QBank, Australian Unity and Nexus Mutual.

The latest edition of APRA’s monthly banking statistics includes the maiden data entries for Judo.

The data indicates that the bank Judo has made inroads  into unexpected parts of the non-retail deposits market since it secured bank authorisation three months ago.

According to the regulator,  Judo was holding A$144 million in deposits at the end of July putting it on an equal footing with the Australian arms of the State Bank of India and OCBC.

However, most of the deposits raised so far have not been sourced from business customers, but government and community organisations. Judo holds $50 million from local government entities and $28 million from community groups and charities.

At the end of July the bank had attracted only $16 million from business customers operating outside the financial services sector.

APRA reported that Judo had a loan book worth $314 million, of which $295 million was attributable to business borrowers outside the financial services industry.

Judo had a modest mortgage book of only $19 million.

The bank’s total assets exceeded $517 million and included $92 million in cash and $64 million in investments.

86 400, which acquired a full banking licence only weeks ago is already in the deposit market, playing the bonus rate game.