Judo Capital Holdings Limited · ASX:JDO
Judo Capital — Investor Presentation (October 2023)
37 slides from Judo Capital's investor presentation, Oct 23, 2023
Slide 1: Investor Presentation
bank Boldly backing business Investor Presentation y- brates Ss ler] [Ste ae Judo Capital Holdings Limited
Slide 2: Important disclaimer
~° Important disclaimer. judobank. This presentation has been prepared and authorised by Judo Capital Holdings Limited ACN 612 862 727 (Judo) in relation to the proposed offer by Judo of Capital Notes to rose $75 millon with the ability to raise more or less (the Offer), The Offer is mode pursuant t
Slide 3: Contents
~- Contents. judobank. Section 1 Offer summary 4 Section 2 About Judo 6 Section 3 Key features and risks of Capital Notes 21 Section 4 Offer process 28 Appendix 32 ) 3 Capital Notes Investor Presentation
Slide 4: Offer summary
Judobank Section 1 Offer summary. nn JMWWWWWWWWJWW WG
Slide 5: Offer summary
~° Offer summary. judobank. Issuer + Judo Capital Holdings Limited Judo), the parent company of Judo Bank Pty Ltd (Judo Bank) Security + Fully paid, subordinated, perpetual, unsecured, convertible notes Offer size + $75m, with the ability to raise more or less + Capital Notes are being issued to rai
Slide 6: About Judo
Judobank Section 2 About Judo. nn JMWWWWWWWWJWW WG
Slide 7: Our purpose
Our purpose: To be the most trusted SME business bank in Australia judobank. Judo Bank is a unique, pure-play, specialist SME bank Consistent strategy since day one, based on a clearly defined and sustainable competitive advantage We are successfully executing a clear plan to become a world-class SM
Slide 8: Overview of Judo Bank
~- Overview of Judo Bank aunched in 2018, is Australia’s only bank dedicated to lending to small-and-medium enterprises (SMEs) 2. Reross FY23, measuring JUG judobank. Our values & Lax (a Accountability Performance Teamwork Trust Who we are As a unique specialist pure-play SME business lender, we are
Slide 9: Building a World Class Bank
~° Building a World Class Bank. judobank. Wr World Class * Build a world class SME business bank * Achieve key business metrics at scale and ROE in the low- to mid-teens * Market leading NPS >20 points above avg of majors o20 (()) Scaling the Bank * Embed our unique culture and operating model £3, B
Slide 10: We are running our own race
~» We are running our own race. > 10 $3bn or 46% lending growth over FY23; 8x system growth As at 30 June 2023, market share was less than 2%! Established four new locations during FY23: Bunbury, Rockhampton, Orange and Albury Investment in agriculture and health specialisations 123 bankers and 50 a
Slide 11: Loan book composition
~* Loan book composition. judobank. Judo Bank’s loan book over time ($bn) Key loan book metrics (as at 30 June 2023) 8.9 10% 75 61 45% 90% 48 3.5 = Floating Interest only 2.6 Fixed Principal & interest 18 L| 24% Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Business Loans mAsset Finance m Home Lo
Slide 12: Funding mix
~* Funding mix. judobank. Movement in funding sources ($bn) Funding sources + Judo Bank's term deposit balance was $6.0bn as at 30 June 2023, with an average tenor at origination of ~14 months, and remaining tenor of ~9 months. + — $2.5bn in committed warehouse capacity as at 30 June 2023, 6.4 with
Slide 13: Transition to longer term funding stack
— Transition to longer term ) 13 funding stack. + As presented opposite, Judo Bank is in the process of transitioning to its longer-term funding stack + We have grown deposits from 36% to 50% of funding over the past two years + Judo Bank has built a strong term deposit franchise and remains confide
Slide 14: Term deposit margins
~° Term deposit margins. ) Judo Bank’s hedged margin over 1m BBSW for new term deposits (bps) 100 90 Through-the-cycle aq sumption oF 8090 bps 70 60 Market volatility, including 50 offshore bank failures 40 30 20 10 ° i i Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 TFF Repayment Details Top 102 Judo B
Slide 15: NIM performance
~- NIM performance. judobank. Underlying NIM' Waterfall - half-on-half (%) FY24 will be a transitionary funding year for Judo as the TFF is repaid. Beyond FY24, Judo expects to see progress towards the at-scale target of >3%. 3.56% (0.19%) 0.13% 3.49% 0.06% (0.17%) (0.07%) oN eat epost costs for ||
Slide 16: Judo Bank's model works through all parts of the cycle
~* Judo Bank’s model works through all parts of the cycle. Judo way of banking Low customer-to- banker ratio Early detection of issues Clear arrears management process Individualised approach to resolution > 6 As at 30 June 2023, ratio of 30 customers to one banker, on average judobank. Specialist m
Slide 17: • • 1.2 0% 1.0 0% 0.8 0% 0.6 0% 0.4 0% 0.2 0%
• • 1.2 0% 1.0 0% 0.8 0% 0.6 0% 0.4 0% 0.2 0% 0.0 0%
Slide 18: 1.40% • 1.20% 1.00% 0.80% 0.60% 0 0.40% 40 0.20% 20 0 0.00% •
200 1.40% 180 • 1.20% 160 140 1.00% 120 0.80% 100 0.60% 80 60 0.40% 40 0.20% 20 0 0.00% •
Slide 19: Summary of the FY23 results
~- Summary of the FY23 results. Judo remains on-track to achieve its key business metrics at scale Key business FY22 Result FY23 Result f metrics at scale GLAs $6bn $9bn $15-20bn Underlying NIM2 2.79% 3.53% >3% i $25m $55m . Cost of risk (53bps of GLAs) (74bps of GLAS) 50bps of GLAs Cost ko Insenne
Slide 20: Capital
~* Capital. Total Capital Ratio (%, as at 30 June 2023) 0.9% 18.9% Le Jun-23 Adjustment for the CET1 Ratio Notes: 1. These adjustments assume the term securitisation transaction was completed on 30 June 2023, net of estimated issue transoction costs of approximately $2.7m excluding GST. Adjustments
Slide 21: Key features and risks of Capital Notes
Judobank Section 3 Key features and risks of Capital Notes. nn JMWWWWWWWWJWW WG
Slide 22: Capital Notes key features
~* Capital Notes key features. judobank. eS Judo Capital Holdings Limited (Judo), the parent company of Judo Bank Pty Ltd (Judo Bank) Judo Bank is the sole operating subsidiary of Judo Issuer + Judo Bank is an authorised deposit-taking institution (ADI) regulated by APRA * Judo is authorised by APRA
Slide 23: Capital Notes key features (cont'd)
~* Capital Notes key features. (cont’ judobank. + Distributions are discretionary, non-cumulative, floating rate payments in Australian dollars - Capital Notes are scheduled to be paid quarterly in arrears, subject to no Payment Condition existing in respect of the relevant Distribution Payment Date
Slide 24: Summary of events that may affect Capital Notes
~» Summary of events that may affect Capital Notes. judobank. 'ssue Date Optional Conversion / Redemption / Resale Dates Mandatory Conversion Date Potentially 16 November 2023 perpetual 16 February 2029 16 May 2029 16 August 2029 16 November 2029 16 November 2031 ! If Judo chooses, certain condition
Slide 25: Ranking of Capital Notes in a Winding-Up
~- Ranking of Capital Notes in a Winding-Up. judobank. Ra Typ Illustrative examples Liabilities preferred by law including employee entitlements Preferred and secured debt and secured creditors Higher ranking Unsubordinated and unsecured bonds and notes, trade and Unsubordinated and unsecured debt g
Slide 26: Capital Notes key risks
~* Capital Notes key risks. judobank. Capital Notes are not deposit or policy liabilities or protected accounts Capital Notes are not protected accounts of Judo Bank for the purposes of the depositor protection provisions in Division 2 of Part Il of the Banking Act or otherwise protected under the F
Slide 27: Capital Notes key risks (cont'd)
~* Capital Notes key risks. (cont’d) judobank. Capital Notes are perpetual and may not be Converted Capital Notes may not be Converted on the Mandatory Conversion Date if the Mandatory Conversion Conditions are not met and you may continue to hold Capital Notes indefinitely Capital Noteholders have
Slide 28: Offer process
Judobank Section 4 Offer process. nn JMWWWWWWWWJWW WG
Slide 29: Offer structure
~ Offer structure. judobank. Offer structure The Offer comprises: - an Institutional Offer made to certain Institutional Investors; and - a Broker Firm Offer made to certain Australian resident clients of Syndicate Brokers. Applications will only be accepted from Retail Investors who satisfy the eli
Slide 30: Key dates
~- Key dates. judobank. > Lodgement of the Prospectus with ASIC 23 October 2023 Bookbuild to determine the Margin commences 23 October 2023 Announcement of the Margin by 31 October 2023 Lodgement of the replacement Prospectus with ASIC 31 October 2023 Opening Date for Broker Firm Offer 31 October 20
Slide 31: Contact directory
~* Contact directory. judobank. Judo Treasurer Michael Heath +61 401 186 350 Arranger and Joint Lead Manager Barrenjoey Barry Sharkey +61 2.9903 6777 Joint Lead Managers E&P Corporate Advisory Andrew Serle +613 9411 4076 Morgans Steven Wright +617 3334 4837 Westpac Institutional Bank Allan O'Sulliva
Slide 32: Appendix
Judobank Appendix. nn JMWWWWWWWWJWW WG
Slide 33: FY23 Result
—~» FY23 Result. judobank. Profit & Loss Statement Income ($m) 353.0 173.0 104% Operating Expenses ($m) 190.9 132.0 45% Net Profit Before Impairments ($m) 162.1 41.0 Large Impairment Expense ($m) 54.6 25.4 15% Profit Before Tax ($m) 107.5 15.6 Large Key Operating Metrics GLAs ($bn) 8,908 6,092 46% U
Slide 34: Our ESG underlying beliefs
~* Our ESG underlying beliefs. judobank. We believe in supporting our customers to be sustainable both now and into the future. We have continued to support customers through aq oo our hardship policies and through support of the Federal Government's SME Guarantee Scheme and SME Recovery Loan Scheme
Slide 35: Mandatory Conversion
~» Mandatory Conversion. judobank. > 35 The Mandatory Conversion Date is scheduled to be 16 November 2031, provided the Mandatory Conversion Conditions have been satisfied on that date. If any of the Mandatory Conversion Conditions are not satisfied on this date, then the Mandatory Conversion Date w
Slide 36: Mandatory Conversion (cont'd)
~* Mandatory Conversion. (cont’d) judobank. Loss Absorption Event A Loss Absorption Event is a Non-Viability Trigger Event or a Common Equity Trigger Event Non-Viability Trigger Event A Non-Viability Trigger Event means APRA has provided a written determination to Judo that: — The conversion to Ordi
Slide 37: Comparison between Capital Notes and other types of investments
~» Comparison between Capital Notes and other types of investments. judobank. Feature Term Deposit Capital Notes Ordinary Shares Issuer Judo Bank Judo Judo Legal form Bank deposit Unsecured, subordinated debt Ordinary share Eligible for protection under the Australian Ves ne No Government Financial
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