Judo Bank's 1H24 Financial Results Overview

Judo Capital Holdings Limited (ASX: $JDO) has reported its full financial results for the six months ended 31 December 2023 (1H24). The bank achieved a 24% increase in 1H24 Profit Before Tax (PBT) to $67m and demonstrated disciplined lending growth, with net lending growth of approximately $800m, representing about three times system business credit growth.

Executive Commentary on 1H24 Results and Strategy

Judo Bank's CEO, Joseph Healy, emphasized the bank's ability to dynamically balance growth and margins within existing risk settings. He highlighted the consistent execution against the long-term strategy, prudent growth, and improvement in front book lending margins. He also mentioned the cautious approach to lending, expansion into regions, and the strong improvement in front book lending margins in the December quarter, reflecting the bank's disciplined approach to achieving appropriate risk-reward economics. Healy further discussed the bank's deposit franchise, funding strategy, investment in core systems, and support for customers in the current environment. He reiterated the bank's commitment to achieving optimal risk-reward economics and its goal of being a world-class SME business bank.

1H24 Financial Results Summary and Outlook

Judo Bank's 1H24 financial results reflect a 24% increase in Profit Before Tax (PBT) to $67m and disciplined lending growth, demonstrating the bank's agility and response to changing market dynamics. The bank's focus on SME lending, cautious approach to lending, and expansion into regions have contributed to the improvement in front book lending margins. Judo's well-established deposit franchise and funding strategy position the bank for continued growth and repayment of the RBA's Term Funding Facility. The bank's outlook includes guidance for FY24 and a target of 15% or higher profit growth in FY25, assuming economic conditions stabilize. Judo remains committed to achieving optimal risk-reward economics and its goal of being a world-class SME business bank, delivering ROE in the low to mid-teens, continued above-system lending growth, and market-leading net promoter and engagement scores.