Judo Capital (JDO) Q3 2025 TU earnings summary

Executive summary

• Continued execution of specialist SME lending strategy amid increased market volatility, with strong customer support and market-leading NPS of +51 and origination NPS of 88 for the quarter.

• Regional expansion on track, with 158 relationship bankers in 27 locations, aiming for 31 by June 30.

• Completed migration to a new core deposit platform, finalizing a 12-month tech upgrade and completing major CapEx cycle.

• Executing strategy to achieve significant operating leverage in 2H25 and beyond, targeting at-scale ROE in low-to-mid teens.

• Focused on balancing growth and economics amid heightened market volatility.

Financial highlights

• Gross loans and advances (GLA) at AUD 11.7 billion at March-end; Q3 net growth subdued due to seasonality and proactive portfolio management.

• New lending margins strong at 4.6%, blended lending margin at 4.3% in Q3.

• AAA pipeline at AUD 1.6 billion, average margin in mid-400s over swap.

• Term deposit balances over AUD 9 billion; blended cost of deposits in Q3 within 80-90 bps over swap.

• Q3 NIM within 2.9-3% target range; reaffirmed for H2 FY2025.

• CET1 ratio at 13.8% as of March 31.

Outlook and guidance

• FY2025 GLA expected between AUD 12.4-12.6 billion, revised down from previous guidance due to elevated runoff, market uncertainty, and slower warehouse lending.

• FY2025 NIM target unchanged, aiming for upper end of 2.9-3% and exit NIM of 3%.

• FY2025 cost-to-income ratio expected to be lower than FY2024 due to disciplined expense management.

• FY2025 profit before tax growth targeted at 15%; FY2026 profit before tax growth targeted at 50%, assuming normalized market conditions and operating leverage.

• Lending growth guidance for FY2026 at AUD 2-2.5 billion, reflecting elevated runoff and competitive pressures.