Judo Capital (ASX:JDO), an Australian bank specialising in lending to small and medium-sized enterprises (SMEs), has reported a solid year of financial performance, with a notable 9.5% increase in annual revenue for the fiscal year ending 30 June 2024. The bank’s revenue reached $326.6 million, driven by its focused lending strategy to underserved SMEs.
Despite the revenue growth, Judo faced challenges with its net income, which saw a slight dip of 4.8% year-on-year, down to $69.9 million. This pressure on profit margins has been attributed to increased competition in the SME lending market and the rising costs associated with maintaining high credit quality amid a tightening economic landscape. However, Judo’s loan book remains robust, reflecting the bank’s targeted approach to filling the gaps left by larger financial institutions.
CEO Joseph Healy acknowledged the complexities of the market but expressed optimism: “Our focus on high-quality lending to SMEs continues to yield results, even in a competitive environment. We remain committed to supporting Australian businesses through tailored financial solutions that are not easily found in larger banks”.
Judo’s emphasis on SME lending has allowed it to carve out a niche in the Australian banking sector, leveraging its relationship-based approach to attract business clients. The bank’s adaptability in a changing market environment will be critical as it aims to expand its loan book to between $15 billion and $20 billion over the next few years.