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The SME challenger bank has reconfirmed its FY25 profit guidance after reporting a record $2.3 billion in new lending.
ASX-listed lender Judo Bank has released its half-year results for the financial year ending June 2025 (FY25), with the SME challenger bank reporting a new record in gross originations.
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At its investor presentation on Tuesday (18 February), Judo Bank reported $2.3 billion in new lending for the six months ending December 2024.
This figure represented a 27.77 per cent increase on the previous corresponding period (1H24), when the SME lending specialist reported gross originations of $1.8 billion.
Judo Bank’s total loan book has now grown to $11.6 billion, according to the SME challenger bank, a $900 million increase from $10.7 billion recorded in the last reporting period (2H24).
The proportion of loans written by brokers remained unchanged for the second successive reporting period at 75 per cent.
Meanwhile, 90-plus day arrears and impaired loans were stable at 2.30 per cent of gross loans and advances (GLA), compared to 2.31 per cent reported in the results for 2H24.
These figures contributed to a statutory net profit after tax (NPAT) of $40.9 million, up 70 per cent from 2H24 ($24.0 million), with the lender reconfirming its FY25 guidance of 15 per cent growth in profit before tax (PBT).
Chris Bayliss, Judo Bank CEO and managing director, said the result demonstrated the execution of a “clear and simple” strategy to scale the bank to “meet the needs of more Australian SMEs”.
“Judo’s unique customer value proposition continues to resonate with SMEs, demonstrated by our market-leading NPS score, and we are making great progress with our regional expansion strategy,” Bayliss said.
Regions and relationships
Expansion into areas such as agribusiness and regional finance has been a feature of Judo Bank’s recent strategy, with the lender adding five new locations and 15 bankers during the first half of FY25.
Speaking to The Adviser, Frank Versace, Judo Bank chief strategy and growth officer, said the lender sees significant opportunities in the regions.
“Also from a proposition perspective, the need for relationship banking in agribusiness and the regional centres almost seems to be stronger than what we see in the metro areas,” Versace said.
The lender’s relationship-driven approach has also resonated with SME borrowers in recent times, according to Versace.
“There’s lots of different business models, lots of different industries, lots of different business operators, businesses that have very different phases of their life cycle. All of this needs to be taken into consideration when you’re assessing the credit worthiness and the support required by these businesses,” Versace said.
“It’s very difficult to do without understanding that from the perspective of a person to person relationship. Our reintroduction of the highly capable, highly experienced, highly empowered relationship manager is the thing that I think has resonated most with SMEs.”
Despite the increase in banker numbers, Versace said finance brokers will continue to play an important role for Judo Bank.
“We see them playing a very important role for us. We see it as a genuine partnership between the bank, the broker and the customer,” he said.
“The tripartite relationship that we refer to internally relies heavily on having high quality brokers accredited with us and having strong relationships with them.”
Chair succession
Meanwhile, Judo Bank also announced that Peter Hodgson would be stepping down as chair, effective 28 February 2025.
Hodgson has served as the lender’s chair since January 2017 and described his time at the lender as a “career highlight”.
“The bank is in a strong position, both in terms of financial performance and capable leaders, so after eight years in the role, I believe it is an appropriate time to hand over to the next chair,” he said.
Hodgson will be succeeded by non-executive director David Hornery, who co-founded Judo Bank and served as co-CEO since inception, before joining the board in 2021.
“Judo was purpose built to serve Australia’s SME community and has made strong and consistent progress in building both the breadth and depth of coverage for what is the lifeblood of the Australian economy,” Hornery said.
“With a growing foundation that now sees 159 bankers in 26 locations across the country, Judo is well positioned and committed to building on the momentum of recent years and continuing to set the standard for relationship banking for SMEs in this country.”
[Related: The big opportunity for brokers to work with SMEs]
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