Judo Capital (JDO) Q3 2025 TU earnings summary

Executive summary

• Continued execution of a specialist SME lending strategy amid a volatile environment, with strong customer support and market-leading NPS scores (overall +51, origination +88 in the quarter).

• Regional expansion progressing well, with 158 relationship bankers in 27 locations, targeting 31 by June 30.

• Migration to a new core deposit platform (Temenos) completed, finalizing a 12-month tech upgrade and enhancing flexibility.

• Strategy focused on balancing growth and economics, targeting significant operating leverage in 2H25 and at-scale ROE in low-to-mid teens.

Financial highlights

• Gross loans and advances reached 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.

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

• Q3 NIM within 2.9-3% target; operating expenses growth slowed, with major investments in core systems now complete.

• CET1 ratio at 13.8% as of March 31, maintaining a strong capital position.

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 reaffirmed at 2.9-3%, aiming for upper end and 3% exit NIM; cost-to-income ratio expected to be lower than FY2024.

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

• Lending growth of AUD 2-2.5 billion per annum seen as viable, with focus on protecting book economics amid increased competition and elevated runoff.