Judo Bank boss Joseph Healy says small and medium firms will be able to withstand the strongest pressure on wages he can recall, delivering an upbeat outlook for business borrowers as the lender made its ASX debut.
Mr Healy, co-founder of the business-focused bank, on Monday said all sectors of the economy were starting to feel wage pressure as activity rebounded, highlighting recent reports of double-digit growth in some pay packets.
Judo Bank co-founders Joseph Healy and David Hornery.Credit:Cole Bennetts
He made the comments as shares in Judo, the first fully licensed bank to list on the ASX in 25 years, jumped 7.6 per cent on the bank’s first day of trading.
On top of the skills shortages in industries such hospitality, Mr Healy said inflationary pressure was also building to retain and attract staff in sectors such as banking. He also noted reports of among some law firms giving staff 10 per cent pay rises to retain skilled workers.
“This is not 3 to 4 to 5 per cent wage pressure, this is 10 per cent wage pressure,” Mr Healy said. “It’s the strongest wage pressure that I can remember.”
The threat of higher inflation is a growing debate in financial markets, sparking some predictions the Reserve Bank may act to raise interest rates late next year, compared with previous guidance that rates would probably not move until 2024.
Mr Healy, previously head of National Australia Bank’s flagship business lending arm, said even if interest rates did start to rise, business borrowers were well-placed to handle it because of their lower levels of indebtedness, compared with households.
“We are not expecting any credit issues at all as we come out of lockdown,” he said.
“I think you will see a significant bounce, and that’s notwithstanding the inflation pressures that are building up in the economy.”
