Judo Bank reaffirms FY guidance despite rising bad debts
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The news: Judo Bank has lifted profits and reaffirmed its full year guidance despite flagging an increase in bad debts in the third quarter.
The numbers: The neobank reported profit before tax of $93.1 million for the nine months to 31 March 2024, up from $67 million at the end of December 2023. It holds a gross loan book of $10.2 billion as at 8 May. Customers with debts beyond 90 days rose to 2.63% of its gross loan book at March-end, up from 1.73% in December. Despite this, the lender is sticking to its full year PBT guidance of $107 million to $112 million.
The bank's shares were down 0.36% to $1.38 in early trading on the ASX. Over the last 12 months the bank's shares have risen 14.58%.
The context: Judo Bank, which listed in November 2021, said it is now funding most of its lending growth with deposits, reducing reliance on more expensive warehouse funding.
New CEO Chris Bayliss announced the lender would cut some non-customer-facing roles that were no longer required as part of its technology investment program, and also made several executive changes. Chief risk officer Frank Versace will move into the chief strategy and growth officer role from 1 July, while relationship banking managing director Stephen Mifsud will be promoted to executive general manager in the same department.
What they said: “The impacts of higher interest rates and inflation continue to work their way through the economy. As expected, our credit quality metrics continue to normalise and we have seen more customers enter arrears, with our approach remaining to assist and work with impacted customers during this challenging period,” Bayliss said.
The source: ASX announcement
