Judo Bank’s Board Changes Signal Strategic Shift Amid Strong Growth
Judo Capital Holdings Limited reported strong FY25 results with significant lending growth and profit increases, while expanding its SME banking footprint and advancing technology. The bank sets confident FY26 guidance amid strategic board changes.
- 16% growth in SME lending book to $12.5 billion
- 14% rise in underlying profit before tax to $125.6 million
- Expansion to 31 locations with 165 relationship bankers
- Successful core technology replatforming completed
- FY26 profit guidance of $180–190 million with stable net interest margins
Strong Financial Performance and Strategic Growth
Judo Capital Holdings Limited, a specialist SME-focused bank, convened its 2025 Annual General Meeting to highlight a year of robust financial performance and strategic progress. The bank's lending portfolio grew by 16% to $12.5 billion, nearly doubling the system growth rate, while underlying profit before tax increased 14% to $125.6 million in FY25. This growth was underpinned by disciplined cost management and improved net interest margins, reflecting the bank's operational efficiency and market positioning.
CEO Chris Bayliss emphasized that Judo’s unique business model, designed specifically for Australian SMEs, continues to resonate strongly with customers. The bank now serves close to 4,700 lending SME clients across 31 locations, supported by a team of 165 relationship bankers. This expansion enhances Judo’s ability to deliver tailored, relationship-driven banking services that foster trust and responsiveness.
Technology and Culture as Growth Enablers
Judo’s recent completion of a core technology replatforming marks a significant milestone, enabling greater scalability, innovation, and operational agility. This cloud-based infrastructure upgrade supports the bank’s ambitions to optimize profitability and customer experience. The bank’s culture, recognized for its strength and employee engagement, continues to be a key differentiator, with Judo named an AFR BOSS Best Place to Work for the third consecutive year.
The leadership team’s focus on recruiting and retaining top talent is evident in a rigorous credit test for bankers and stable attrition rates despite aggressive recruitment in the sector. This commitment to quality and culture underpins Judo’s ability to maintain high customer satisfaction, reflected in its sector-leading Net Promoter Score of +53.
Confident Outlook and Board Evolution
Looking ahead, Judo projects continued momentum with a strong first quarter in FY26, including a $463 million increase in gross loans and advances and a healthy $1.9 billion pipeline of approved applications. The bank’s deposit franchise also grew to $10.5 billion, supported by new product launches and improved deposit margins. Judo maintains a well-capitalized position with a CET1 ratio of 13.1%, positioning it well for sustained growth.
FY26 guidance targets profit before tax between $180 million and $190 million, representing approximately 50% growth over FY25, alongside stable net interest margins. The bank is also advancing its warehouse lending segment, expected to enhance return on equity.
Board changes include the retirement of long-serving Director Mette Schepers and the appointment of Brad Cooper, whose experience is expected to strengthen governance as Judo enters its next growth phase. The outgoing Chair, Peter Hodgson, is standing for re-election, continuing his influential role in risk oversight.
Building a World-Class SME Bank
Judo’s leadership underscores the bank’s evolution from its founding vision to a mature institution delivering operating leverage and sustainable profitability. The combination of a pure-play SME focus, empowered bankers, modern technology, and a strong culture positions Judo to redefine SME banking in Australia. As the bank moves into the optimization phase of its strategy, it aims to achieve return on equity in the low to mid-teens, reflecting its confidence in long-term value creation.
Bottom Line?
Judo Bank’s disciplined execution and strategic investments set the stage for accelerated growth and profitability in the competitive SME banking sector.
Questions in the middle?
- How will Judo sustain its competitive edge amid intensifying SME banking competition?
- What specific initiatives will drive further improvements in operating leverage and ROE?
- How might evolving economic conditions impact credit quality and loan growth in FY26?