Fintech upstart doubles loan book thanks to bullish third party performance
Challenger lender Judo Bank has delivered a 24% rise in annual profit, reinforcing its reputation as one of the few neobanks from its generation to successfully scale into the mainstream.\
For the year to June 30, Judo reported net profit after tax of $86.4 million, up from $69.9 million a year earlier. Lending grew strongly, with its loan book reaching $12.5 billion – more than double the size it was three years ago – while customer deposits climbed to just under $10 billion. Net interest margins came in at 2.93%.
The results reflect the bank’s growing presence across regional Australia, where its relationship-led lending model has proved particularly attractive to small and medium-sized businesses.
Judo now operates from 31 locations, more than twice as many as in 2022, and has recruited 161 new bankers over the past year.
Chief executive Chris Bayliss (pictured) vdescribed the 2025 performance as both financially sound and operationally important.
“Judo has delivered another solid set of results for FY25, while achieving several major operational milestones that will allow us to continue to successfully execute our strategy in FY26 and beyond,” he said. “Judo’s growth has followed a deliberate three-phase strategy: to build the bank; then to scale the bank; and now, as we enter FY26, to optimise the bank.”
Brokers central to growth
Brokers remain at the centre of Judo’s growth model. Seventy-five per cent of its loans originate through the broker channel, and the bank is now working with more than 1,560 brokers nationally – up from just over 1,350 the previous year.
For brokers, Judo’s reliance on this network underlines the role they play in connecting SMEs with finance at a time when traditional banks remain cautious.
Looking to the year ahead, the bank has guided loan growth towards $14.2 to $14.7 billion and is targeting a reduction in its cost-to-income ratio below 50%.
Bayliss also flagged continued investment in technology to increase the capacity of relationship bankers and to broaden the bank’s product suite.
Judo was founded in 2016 with the specific aim of filling a gap in SME lending and received its full banking licence in 2019.
It has since become a test case for whether specialist challengers can compete in Australia’s concentrated banking sector. With profit growth accelerating and brokers firmly embedded in its distribution strategy, the bank is positioning itself to strengthen that foothold further in 2026.
Judo Bank: the challenger born out of a lending gap
When Judo Bank was granted its full banking licence by the Australian Prudential Regulation Authority (APRA) in April 2019, it entered a landscape long dominated by the country’s four major banks.
Its arrival was heralded as a significant moment for competition in the Australian financial system: a new lender built from the ground up to serve small and medium-sized enterprises (SMEs) – a segment many believed had been underserved for years.
Founded in 2016 by Joseph Healy and David Hornery, both veterans of National Australia Bank, Judo was created as a direct response to what its founders saw as the declining focus of large banks on relationship-based lending.
Whereas the Big Four had moved increasingly towards automated credit assessment and centralised processes, Judo positioned itself as a specialist SME bank that would revive traditional, face-to-face lending, putting experienced bankers back at the centre of decision-making.
The strategy tapped into a widely recognised gap in the market.
Small businesses account for more than 95% of all enterprises in Australia and employ close to half the workforce, yet surveys and regulatory inquiries repeatedly highlighted dissatisfaction with the availability of credit.
Judo’s pitch– that it would combine modern technology with old-fashioned banking principles – resonated with investors and borrowers alike.
The new entrant attracted significant private capital in its early years and was among the first of the new generation of ‘challenger banks’ to receive an unrestricted licence under Australia’s revised prudential framework.
Unlike some fintech start-ups that sought scale through consumer lending and payments innovation, Judo’s model was deliberately narrower: targeting SMEs with loans typically ranging from $250,000 to $5 million, supported by relationship managers with delegated authority to make credit decisions.
From IPO onwards
Judo listed on the Australian Securities Exchange (ASX) in November 2021, raising around $657 million in what was then the largest initial public offering by a challenger bank in the country.
The listing gave it additional capital to grow its loan book, which has since expanded into the billions, and strengthened its ability to compete for market share against the incumbents.
Backed by a philosophy of “high tech, high touch”, Judo has invested heavily in tech – announcing a number of projects this year to make sure that it is keeping ahead of many other lenders.
Judo’s emergence has also influenced policy debate in Canberra. Regulators and government officials have pointed to its progress as evidence of the value of opening the market to new entrants, and of the importance of regulatory reforms that make it easier for challengers to obtain licences and funding.
While Judo remains small compared with the established majors, its trajectory has been closely watched as a test case for whether challenger banks can carve out a profitable niche in Australia’s heavily concentrated banking sector. Its growth underscores both the demand from SMEs for alternative sources of credit and the potential for specialised institutions to flourish alongside the country’s dominant banking groups.
