Judo Capital rallies after posting a 46% increase in HY profit
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More news: Shares in Judo Capital rallied in early trade after the company reported a 46% increase in statutory profit in the first-half to $59.9 million, supported by continued growth in gross loans and advances.
Shares rose 5.41% to $1.95 at 11:50am AEDT.
UBS analyst John Storey maintained a buy rating on the stock, saying the half-year results reaffirms Judo's investment case as being a high growth challenger bank focused on a single product segment within a low growth, concentrated banking sector.
He said the results provided greater confidence in second-half guidance, with the business continuing to build momentum toward its at-scale metrics.
Milford analyst Minh Pham said Judo continues to track towards its metrics at-scale and described this result as a de-risking event. She added that, as seen across recent bank results, business lending conditions remain robust and Judo, as a specialist SME bank, is well positioned to benefit.
Judo Capital sees 46% rise in interim profit, upgrades FY guidance
The news: Judo Capital Holdings, owner and operator of Judo Bank, reported a 46% jump in first-half statutory profit to $59.9 million, driven by continued growth in gross loans and advances (GLA) during the period.
The numbers: First-half GLA climbed 15% year on year to $13.4 billion. The company upgraded its FY26 GLA guidance from $14.2-14.7 billion to $14.4-14.7 billion.
Net interest margin (NIM) was 3.03%, broadly stable over the half. Second-half NIM guidance was upgraded to 3.15%, reflecting the improved cost of new term deposits.
The bank reaffirmed FY26 guidance, with profit before tax (PBT) in the range of $180-190 million. First-half PBT was up 53% year on year to $86.5 million.
The context: Judo CEO Chris Bayliss said the company remains on track to achieve FY26 guidance for "significant profit growth". The group also noted that business conditions have "improved steadily" during the fiscal year, and stronger consumer demand has helped businesses recover some of the margin losses they experienced post-pandemic. Demand for business credit "remains solid", it said, "with growth stable at around 9%.
What they said: "Looking ahead, further improvement in [small and medium enterprise] trading conditions is expected to be gradual, with the pace of economic growth constrained by capacity shortfalls, including skills labour shortages," the company said in its outlook statement.
"Cost of living pressures, driven by rising inflation and tightening in monetary policy, may moderate consumer demand despite strong household income fundamentals. While global conflicts and trade uncertainty continue to pose a risk, Australian consumer and business sentiment has to date demonstrated resilience to geopolitical instability."
The source: ASX
