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Australia’s Judo Bank eyes $258 million IPO – sources

* IPO targeted for October or November – source

* Judo’s lending pipeline grown to A$2.5 bln

* Profitable Judo sees further growth ahead (Adds comment from company spokesman)

By Paulina Duran

SYDNEY, July 28 (Reuters) – Australian lender to small and medium-sized businesses Judo Bank is considering listing on the Australian stock exchange this year via an initial public offering that would seek to raise about A$350 million ($258 million), sources told Reuters.

The so-called challenger lender has hired investment banks to lead the potential IPO, said two people briefed about the plans, adding that no final decision had been made on the timing of the listing, which will depend on market conditions.

A market source said the company would likely launch the IPO in October or November, after reporting financial results. A representative for Judo declined to comment on the IPO plans.

Judo is one of a few tech-driven lenders that have emerged in recent years to challenge the dominance of Australia’s four biggest lenders. It only received its banking licence in 2019 and has since grown its book to over A$3 billion.

At this stage, the small- and medium-sized enterprises lending specialist expects to raise about A$350 million, the two people with knowledge of the matter said. On top of that, existing shareholders will sell some of their shares as part of the IPO, they added.

The sources declined to be identified because the details are private.

Australia’s four biggest lenders account for about 80% of the local market for loans and deposits.

Unlike other new entrants that struggled to secure funding and make profits, or that have been acquired by larger incumbents, Judo has remained independent of the Big Four and in October became profitable.

The Melbourne-based bank doubled lending volumes in the year to March and was valued at A$1.9 billion when it raised about A$175 million in equity and tier 2 capital securities last month.

“Trading activity has been particularly strong over the past four months. Our lending pipeline currently sits at A$2.5 billion, and with this momentum, we expect to remain profitable even as we grow rapidly,” the spokesman said.

($1 = 1.3591 Australian dollars) (Reporting by Paulina Duran in Sydney; Editing by Ana Nicolaci da Costa and Sonali Paul)

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