Unisuper offloads major stake in Judo Bank

George Lekakis

There has been some change at the top of the share register of Judo Bank, with longstanding institutional investor Unisuper cashing out most of its position in the listed business lender.
 
Unisuper, which has held a major interest in Judo since the banking newcomer listed on the ASX in October 2021, last week offloaded more than 60 million shares to reduce its interest in the company to less than one per cent.
 
The domestic super fund has been one of Judo’s most steady investors since the initial public offering 18 months ago, but decided to reduce its exposure on 1 May – the day that the bank’s chief executive Joseph Healy held a briefing for investors.
 
Judo scrip traded within a range of A$1.23 to $1.32 on 1 May.
 
Before the big sell-off, Unisuper had been Judo’s third largest shareholder with 74.7 million shares that accounted for 6.76 per cent of the company.
 
According to disclosures made to the ASX yesterday, the super fund retains a residual holding of 10.3 million shares.
 
In the trading update last week, Healy upgraded market guidance for the bank’s net interest margin to climb as high as 3.5 per cent in the second half of 2023.
 
The Judo boss also highlighted that the bank had entered the second phase of its growth plan.
 
“We are now well into the second horizon of our growth, which involves investing in technology, digital and data to support a continued increase in our lending as well as deliver a sector leading cost-to-income ratio approaching 30 per cent at scale,” Healy said.
 
During presentations to analysts, Judo’s management disclosed a string of unique metrics on the operating performance of the business, including time-based measures of the origination and servicing facets of the lending business.
 
The bank’s chief operating officer Lisa Frazier told investors that the average Judo loan took 60 hours to originate and 30 hours a year to service.
 
While such messages might not have been received with enthusiasm at Unisuper, they appeared to strike a chord with Sydney activist fund manager, ECP Asset Management. ECP has been an active buyer of Judo stock since the start of March.
 
It was most active on 1 May when it acquired 17 million shares at an average price of $1.25. ECP now holds almost 63 million shares in Judo, giving it a 5.7 per cent interest in the bank.
 
Judo scrip yesterday closed up 4 cents to $1.25.