, Australia
Photo by Caleb Russell via Unsplash.

Judo Bank's rapid growth to continue despite inflation, competition

Competition and higher cost of funding are likely to curtail some margin benefit, says S&P.

Australia’s Judo Bank’s rapid growth is expected to continue over the next two years, benefiting from rising interest rates, says S&P Global Ratings.

Judo Bank announced a 23% increase in lending assets from July to December 2022. It also reported a 72-basis point (bp) improvement in its underlying net interest margin for the same period.

However, competition and higher cost of funding are likely to curtail some margin benefit for the bank over the next two years, the rating agency said.

“We expect ongoing growth in term deposits will help Judo Bank's transition away from the Reserve Bank of Australia's Term Funding Facility (TFF), which is scheduled to mature by June 30, 2024. In addition, Judo Bank continues to diversify its funding base, supporting its ability to meet future repayments of the TFF,” S&P said in a report.

ALSO READ: Fintechs scale back and fold as funding channels dissipate

Despite increased pressure on borrowers from high inflation and rising interest rates, Judo Bank’s credit losses will remain under control over the period.

“We forecast credit losses for Judo Bank to be about 50 bps of loans. However, its rapid loan growth could expose it to hidden credit risks due to limited seasoning or scaling risks,” S&P said.

Follow the link for more news on

Join Asian Banking & Finance community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!


Tempered adoption of AI tools may spell greater leap for fintech firms
Expert underscores generative AI’s strength in streamlining front-of-office work, but banks on human expertise for in-depth development.
Advisory takes centre stage in Danamon's next-Generation Branches
Danamon’s next-generation branches reshape banking by performing more advisory functions and improving customer experiences.