Judo Capital (JDO) Status update summary

Asset quality and provisioning update

• Asset quality issues in three exposures across different sectors led to a specific provision increase of approximately AUD 20 million, raising FY 2026 cost of risk to AUD 116–122 million and 90+ days past due/impaired loans to about 3% of gross loans and advances.

• The exposures at default for these three loans total AUD 70–80 million, with security including property, working capital assets, and directors' guarantees.

• Collective provision coverage is expected to remain around 94 basis points of GLA or 1.9% of standardized credit risk-weighted assets, maintaining prudent macroeconomic overlays.

• These issues are not seen as systemic, and overall portfolio quality and origination practices remain robust.

• Recent credit outcomes are attributed to a small number of customers with borrower-specific issues emerging after Q3 reviews.

Trading and financial performance

• Lending momentum remains strong, with GLA above AUD 14.4 billion and expected to finish FY 2026 at AUD 14.6–14.7 billion, at the top end of guidance.

• Net interest income is outperforming, with NIM for H2 2026 expected at 3.2% or higher, above previous guidance, and lending margins stable at 4.2%.

• Blended deposit costs were 62 basis points over swap in April/May, with new TD costs at 75–76 basis points over swap in Q4.

• Cost-to-income ratio is expected to improve in H2, in line with guidance and below 1H26 (48.5%).

Profit and capital guidance

• FY 2026 profit before tax is expected at AUD 163–169 million, about 30% growth on FY 2025.

• FY 2027 profit before tax is guided at AUD 210–220 million, also representing around 30% year-on-year growth.

• CET1 ratio is expected to finish FY 2026 at around 12.4%, with a new management operating target range of 11–12%.

• Recent term securitization provides flexibility for capital management initiatives.

• Through-the-cycle cost of risk is expected to remain at 50bps of average GLA.