The lender had pitched itself as a disciplined small-business specialist, yet some customer balances have reportedly climbed past $100m, far beyond its early limits. Those numbers are starting to test how far the bank can stretch its model before risk overwhelms growth.
The bank began cautiously in 2018, when it wrote its first loans and capped individual exposures at $5m under its then leadership. That conservative approach helped Judo Bank position itself as a focused lender to Australia’s underserviced small and medium enterprises. In late June, the bank revealed it could face loan losses of between $116m and $122m in the 2025-26 period.
Brokers describe a far tougher review environment for borrowers as the bank tries to get ahead of emerging problems. One broker recounted a client being asked to provide a screenshot of their Australian Taxation Office balance during Judo Bank’s annual review process, a sign of granular scrutiny.
Customer balances in some cases now reportedly exceed $100m, a stark change from the original $5m exposure ceiling. That concentration magnifies the impact when even a small number of loans sour.
Judo Bank’s expansion has leaned into riskier territory, particularly in property and construction segments other lenders increasingly avoid. The strategy aims to capture demand where major banks are reluctant to extend credit, but it comes with a rising cost in impairments. Observers suggest the bank is now caught between its small-business branding and the realities of large, higher-risk exposures.
