Judo Capital (JDO) H2 2024 earnings summary

Executive summary

• Achieved strong FY24 financial performance with profit before tax of $104 million, or $110.1 million excluding one-off costs, up 2% year-over-year, and a loan book of $10.7 billion, representing 20% growth and three times system growth.

• Regional expansion continued with four new locations and 21 additional bankers in FY24, with plans for over 10 new locations and 20 bankers in FY25.

• Maintained focus on SME lending, supported by strong regional expansion, new product initiatives, and high employee engagement.

• Transitioned funding stack by repaying the Term Funding Facility (TFF), increasing deposit funding to 64% of the funding stack.

• Five-year anniversary as a fully licensed bank and surpassed $10bn in lending.

Financial highlights

• Net Interest Margin (NIM) for FY24 was 2.94%, above guidance but down 35bps year-over-year; second half NIM was 2.85%.

• Underlying profit before tax was $110.1 million, up 2% year-over-year; statutory PBT was $104.3 million, down 3%.

• Cost-to-income ratio (CTI) at 54.6%–55%, broadly stable and at the lower end of guidance.

• Impairment expense was AUD 70.1 million (72 bps of GLAs), with provision coverage increasing to 1.39% of GLAs.

• Deposits increased 38% year-over-year to $8.2 billion, with term deposits now 64% of total funding.

Outlook and guidance

• FY25 guidance: profit before tax growth of 15%, lending growth above system with GLAs targeted at $12.7–$13 billion by June 2025.

• NIM expected to be 2.8–2.9% for FY25, with a June 2025 exit NIM of ~3%.

• CTI and cost of risk expected to remain broadly stable; ROE to improve, with significant operating leverage emerging in the second half.

• Continued focus on regional expansion, adjacent segments, and new SME products to drive growth and ROE.

• Targeting low- to mid-teens return on equity (ROE) at scale.