Hey Guys,
I know this is slightly off topic however it’s always good to compare and Fintech type banks against Novatti so we can understand scale and different fascists of similar companies to which you invest in.
please don’t moderate my posts (someone keeps moderating, these are topics relevant to our threads, it provides scope and open discussions).
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The hard work of the Judo Bank team is about to pay off with the founders and select senior executives poised to share about $161 million in cash and shares triggered by the November 1 listing on the ASX.
With an offer price of $2.10 a share, the start-up awarded a banking licence only in 2019 will debut with a market capitalisation of $2.317 billion or about two-fifths the size of Bank of Queensland.
Details of the big payday awaiting the founders and former NAB bankers were revealed in a prospectus that landed on Thursday, after the institutional component of the IPO wascompleted earlier in the week at 1.7 times book value.
Australian equities manager Airlie Funds Management controls more than $5 billion of investor funds, and portfolio manager Matt Williams sized up the bank’s valuation after the conclusion of the book build.
“[They are] obviously highly credible operators with long experience, exploiting a real gap left by the major banks. So the long-term opportunity is clear,” Mr Williams said.
Judo non-executive director and founder David Hornery.Elke Meitzel
“The trade-off, though, is what price to pay?”
After growing the loan book from scratch to $3.5 billion in three years, Judo Bank chief executive Joseph Healy will reduce his interest in the business to 3.1 per cent, worth $73 million, taking $4.9 million off the table via the sale of performance rights.
All of Mr Healy’s remaining shares will be held in escrow until full-year results for the 2022-23 financial year are released.
The former NAB banker will receive a base salary of $1.1 million and a payment of $770,000 ahead of the listing date. He will be eligible for short-term incentives of up to 70 per cent of his base salary and annual long-term incentives also equivalent to 70 per cent of his base.
Co-founder and non-executive director David Hornery will also reduce his stake in the business, to 2.1 per cent, leaving him holding shares worth $42.9 million at the issue price. The prospectus says Judo has acquired a further $4.2 million in performance rights from members of the management board.
Chief financial officer and deputy CEO Chris Bayliss will likewise reduce his stake in the business, to 0.9 per cent, leaving him with a stake worth $20 million. Judo has acquired performance rights from Mr Bayliss to the tune of $9.1 million.
Mr Bayliss will receive a base salary of $700,000 and a payment of $350,000 at the listing. He will also receive a short-term incentive of up to 50 per cent of his base salary and an annual long-term incentive which will also be up to 50 per cent of his base.
Mr Bayliss will also be eligible for another $2 million in deferred rights and options as part of an “IPO Top-up Award” which will vest over five years. Chief operating officer Lisa Frazier will be eligible for $5 million under the same program.
Judo Bank reported a loss of $4.9 million in 2020-21 but is forecasting a $10 million swing in its fortunes to deliver a $5.2 million profit in 2021-22.
The lender has carved out a solid niche for itself in the world of relationship banking and has been a vocal critic of the incumbents for only lending against property.
Judo Bank reached a significant milestone in mid-September when it wasgranted an investment grade rating of BBB- by credit ratings agency S&P Global Ratings.The rating also highlighted some of Judo’s weaknesses, including its higher risk market and price-sensitive customers.
