What was the key takeaway from the Judo Capital (ASX:JDO) Q3 FY26 update?

Judo Bank reaffirmed its FY26 profit before tax guidance of $180 million to $190 million, despite a volatile economic environment. While the bank is hitting its growth targets, it noted that profit is trending toward the lower end of that range.

How did Judo Bank’s lending portfolio perform this quarter?

Judo Bank reported strong growth in its loan book, with gross loans and advances (GLA) reaching $13.8 billion as of 31 March 2026.

Is Judo Capital (ASX:JDO) seeing an increase in risky loans?

While the bank increased its financial provisions for uncertainty, CEO Chris Bayliss stated that asset quality remains stable and the customer base is in good financial health.

What is happening with Judo Bank’s net interest margins (NIM)?

Judo’s Q3 net interest margin (NIM) rose to approximately 3.15%, up from 3.03% in the first half of FY26. This was supported by robust lending margins of 4.2% on new loans.

How is Judo Bank (ASX:JDO) funding its growth?

The bank is successfully shifting its funding mix toward customer deposits, which grew to $11.5 billion by the end of March. The launch of new digital and "at-call" savings products has attracted over $1.1 billion in new capital.

What are the main bull and bear points for Judo Capital investors?

The bull case rests on strong loan growth, improved customer retention, and a rising NIM that signals healthy pricing power. The bear case involves the bank’s profit trending toward the "lower end" of guidance and the need for higher provisions.

Financial

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Judo Bank reaffirms profit guidance amid lending growth

Written by Mahathir BayenaPublished Apr 23, 2026, 10:58 PMLast Updated Jul 6, 2026, 5:56 AM

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.

Judo Bank reaffirms profit guidance amid lending growth

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