SYDNEY (CU)_Last week, Melbourne based Judo Bank, focused on small and medium-sized enterprise lending, became the first authorised deposit-taking institution (ADI) to arrive on the ASX since Macquarie Bank, back in 1996. On its first day of trading on Monday (1 November), the bank exceeded its listing by a massive 7.6 per cent, resulting in a valuation that moved to $2.5 billion by the end of the day.
Just a week later, Australia’s newest start-up bank, Avenue Bank, is looking to raise fresh capital, with the aim of obtaining a full license from the Australian Prudential Regulation Authority (APRA) around mid-2022. Backed by Liberty Financial Group, the bank has already raised almost $50 million of equity capital. Focused on building a digital business bank, the Sydney-based financial service provider is currently testing a working capital product with a limited number of customers. It expects to commence services early next year and is now raising $12 million in fresh capital.
Just like Judo bank, Avenue is also targeting small and medium-sized businesses unsatisfied with major banks, and it plans to list on the Australian stock exchange around a similar time frame as Judo. “Avenue Bank forecasts a short pathway to profitability and also intends to approach the IPO market within two-and-a-half years of receiving its full banking licence, which is slated for 2022,” chief executive George Confos, who is also a former Commonwealth Bank senior manager, said.
According to Confos, the start-up bank hopes to attract SME customers by developing a tailor-made working capital product, which will not require residential property security, which is usually a challenge faced by small business borrowing from some of the major lenders in the country.
“The big banks have been very focused on investment in the retail banking space; Avenue Bank will direct its investment to the smaller SME segment that has not had a similar level of attention. Avenue Bank will lead the shift in this direction,” he said. “Avenue recognises the need to have superior engagement with customers and plans to be digitally enabled for a seamless customer experience, assisting customers in the place that is right for them.”
