Judo Capital (ASX:JDO), which operates as Judo Bank, has reaffirmed its full-year 2026 profit guidance following a resilient third-quarter performance, despite navigating a complex macroeconomic landscape.
The specialist SME lender announced it is on track to deliver a profit before tax of between $180 million and $190 million, albeit trending towards the lower end of that range due to a prudent top-up of its collective provisions in response to ongoing market uncertainty.
The bank reported significant expansion in its lending portfolio, with gross loans and advances climbing to $13.8 billion as of 31 March, up from $13.4 billion in December.
The growth was bolstered by a notable improvement in customer retention, as annualised attrition plummeted from 33% in the second quarter to 15% in the third.
CEO Chris Bayliss emphasised that the bank’s relationship-led model and low banker-to-customer ratio have been pivotal in maintaining stable asset quality during periods of heightened volatility.
The net interest margin rose to approximately 3.15%, supported by robust lending margins of 4.2%.
On the funding side, Judo’s deposit base grew to $11.5 billion, aided by the successful rollout of new digital and intermediated savings products.
While deposit costs currently sit below long-run averages at 74 basis points over the bank bill swap rate, management expects pricing to normalise as the financial year concludes, further aligning the bank with its long-term target of achieving return on equity in the low-to-mid teens.