The Judo Capital Holdings Ltd (ASX: JDO) share price is in focus after the specialist SME lender reported a strong full-year FY26 result, with profit before tax up 34% and deposits jumping 24%.
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What did Judo Capital report?
- Statutory net profit after tax (NPAT) rose to $111.1 million, up 29% from FY25.
- Profit before tax (PBT) climbed 34% to $168.1 million.
- Gross loans and advances (GLA) increased 18% year-over-year to $14.7 billion.
- Deposits grew 24% to $12.2 billion, now making up more than 70% of total funding.
- Net interest margin (NIM) was 3.13% for FY26, up 20 basis points.
- Cost-to-income (CTI) ratio improved to 45.3%, down 710 basis points.
What else do investors need to know?
Judo's loan growth outpaced system averages, with the lending book closing at the top end of FY26 guidance. The bank credited its experienced team and a sector-leading Net Promoter Score of +58 for this performance.
The bank expanded its product line-up, launching two new at-call deposit products. Impairment charges rose to $117.7 million due to an increase in specific provisions, but this was at the lower end of revised guidance and the proportion of impaired assets remained below previous estimates.
Judo finished the year with a strong Common Equity Tier 1 (CET1) capital ratio of 12.4%, above management's targeted range.
What did Judo Capital say?
CEO Chris Bayliss said:
FY26 has been another year of genuine momentum for Judo. While the increase in specific provisions late in the year was disappointing, the underlying performance of the Bank has remained strong, with record revenue, continued operating leverage, strong deposit growth and lending at the top end of guidance. We have continued to deliver above-system growth, underpinned by our customer value proposition of smarter judgement, faster decisions, and stronger relationships… We remain highly confident in our business model. We have a proven customer value proposition, our balance sheet remains strong, and we remain on course to deliver a return on equity in the low-to-mid teens. I thank the Judo team for their unwavering focus on our vision to build a world-class business bank.
What's next for Judo Capital?
Looking ahead, Judo has reaffirmed its FY27 guidance, targeting profit before tax of $210–$220 million – up 25–31% – and a return on equity near 8%. The bank expects net interest margins to remain stable, with further improvements in cost-to-income efficiency as it scales.
Despite economic uncertainties and moderate growth expected in FY27, Judo aims to maintain above-system loan growth, leveraging its specialist SME banking model to support Australian businesses.
Judo Capital share price snapshot
Over the past 12 months, Judo Capital shares have declined 48%, trailing the All Ordinaries Index (ASX: XAO), which is flat over the same period.
