Investor worries about growing pressure on small business have shredded Judo Bank shares after the specialist lender said three loans made to companies in different sectors and states had soured in recent weeks.

Judo’s chief executive Chris Bayliss hastily arranged a call with analysts on Thursday morning to explain why the bank was forced to increase specific provisions by $20 million, a week before the financial year-end and just six weeks after its latest market update. During the briefing, its shares plunged 40 per cent, wiping $400 million off the valuation.

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