The Australian Prudential Regulation Authority has granted Judo Bank, formerly Judo Capital, a licence to operate as an authorised deposit-taking institution without restrictions in what is being welcomed as a win for banking competition and fintechs.
Judo, which refers to itself as a challenger bank, is focussed on Australia's small and medium sized business market with business loans, lines of credit, equipment loans, finance leases and home loans for business lending customers.
Judo chairman Peter Hodgson said: "We are delighted to be granted an unrestricted banking license, helping to solidify our position as Australia's first fully licensed challenger bank dedicated to small and medium-sized business lending."
Hodgson said Judo worked closely with APRA to achieve its full license and to meet the strict conditions necessary for a licensed bank. Judo first applied for the ADI in May 2018.
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"On behalf of our investors and Judo team across Melbourne, Sydney and Brisbane, we are delighted to have been granted this full banking license, following new legislation that has opened up the industry to much needed competition," he said.
Hodgson also thanked those in the business community who support Judo.
Judo was advised on its banking licence application by law firm Ashurst, which released a statement celebrating the success following APRA's decision.
Ashurst partner Stuart Dullard said: "Ashurst is delighted to have assisted Judo in obtaining its banking license.
He said it represents a huge vote of confidence in Judo as a new entrant to the Australian banking sector.
"Obtaining a banking license is a significant achievement for Judo and is a testament to the quality of Judo's board and management, and supportive shareholder base," Dullard said.
"It places Judo in an excellent position to continue to go from strength to strength."
Partner Jonathan Gordon added: "Successfully navigating the rigorous process of approvals is testament to the high calibre team at Judo, and we are delighted to helped them to become the first start-up SME lender to gain a banking authorisation in Australia."
"We are seeing a lot of interest in the area, so it is great to see Judo achieve this milestone."
Xinja Bank is also awaiting a full licence from APRA. It too welcomed the news of Judo's success.
Chief executive of Xinja Eric Wilson said: "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."
Another new institution awaiting a full ADI licence is 86 400. Robert Bell, chief executive of 86 400 and former chief executive of ANZ Japan, welcome Judo Bank's news.
He said: "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.
"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."
Judo is the second fintech to be granted an unrestricted ADI licence this year, the first being Volt.