Judo Bank continues to grow despite economic uncertainty.
The Australian bank, which specializes in small and medium-sized businesses (SMEs) lending, grew its loan volumes to $13.8 billion during the third quarter, or the three-month period ending 31 March 2026. That's up from $13.4 billion the same time last year, a difference of roughly $400 million, and in line with the group's expectations. The bank credited strong origination volumes and customer retention as the primary drivers for its recent growth.
Judo's growth comes amid a backdrop of economic uncertainty both at home and abroad, including persistent inflationary pressures and the continued conflict in the Middle East, which have driven up oil prices and costs for small businesses. As a result, many SMEs are tightening budgets and reassessing expansion plans in the face of increased expenses.
"We've seen a pretty large decrease in business sentiment," Ashwin Clarke, senior economist at CBA, told Australian Broker.
But Judo's Chief Executive Officer and Managing Director Chris Bayliss said the bank continues to expand despite a challenging operating environment.
"Judo continues to give its full support to Australian small and medium-sized enterprises as they navigate heightened volatility in the operating environment," he said.
Bayliss added that the firm is still on track to meet its existing guidance, expecting a profit before tax for the 2026 financial year of approximately $180 million to $190 million. Judo expects its loan book to grow to between $14.4 billion and $14.7 billion over the course of the financial year.
However, the bank is taking a more cautious stance amid continued global uncertainty.
"Given the changes in the macro environment, our experienced relationship bankers have completed a customer-by-customer assessment of the portfolio," he said. "While our customer base remains in good financial health, we have prudently chosen to strengthen our forward-looking collective provision in recognition of ongoing uncertainty for the outlook. Notwithstanding the provision increase, we are still on track to deliver FY26 profit before tax within our original guidance range, albeit towards the lower end."
Meanwhile, as talk of rising loan defaults ripple through the market, Judo said in its most recent report that "asset quality trends have remained stable."
As at 31 March, 90-days-past-due and impaired loans were 2.65% of the company's total loan book, a slight improvement from 2.66% in December 2025.
Even so, while bad loans have not yet increased, the bank is preparing for potential deterioration given heightened global uncertainty. It flagged particular exposure to sectors such as agriculture, construction, retail, manufacturing and transport, which are more vulnerable to higher fuel costs and weaker economic conditions. Judo now expects loan losses to be around 0.70% to 0.75% of its loan book this year.
