Sydney, June 26, 2026, 02:08 (AEST)
- CBA ended down 1.27% at A$162.70 on Thursday. The S&P/ASX 200 shed 0.7%, finishing at 8,748.
- The estimated A$3.5 billion loss in market value was 5.3 times bigger than the A$660 million wiped from Judo.
- CBA’s trailing price-to-earnings ratio ran 47% higher than the average for its three biggest listed peers.
Commonwealth Bank of Australia shed around A$3.5 billion in market cap on Thursday as Judo Capital’s bad-loan alert weighed on Australian banks. CBA dropped less than the other Big Four banks in percentage terms, but its big valuation made the drop in dollars much steeper than Judo’s.
CBA finished A$2.09 down at A$162.70. That 1.27% fall cut about A$3.50 billion off its closing market value of A$272.27 billion, which is roughly 5.3 times the A$660 million market cap loss at Judo.
Judo dropped 40.39% to A$0.92, closing with a market cap near A$1.02 billion. CBA is about 267 times Judo’s size. A 1% swing in CBA equals about A$2.7 billion, over twice Judo’s full closing value.
National Australia Bank (ASX:NAB) dropped 3.35%. ANZ Group Holdings (ASX:ANZ) fell 2.19%, and Westpac Banking Corporation (ASX:WBC) slipped 2.01%. CBA’s decline was less steep, with the market seeming to think Judo’s three troubled borrowers didn’t have a direct impact on CBA’s loan book.
The drop on Thursday was about one-eighth of the almost A$30 billion CBA lost on May 13, when a jump in provisions and new Australian housing taxes sent shares down 10.43%. The difference points to CBA’s valuation still being more exposed to shifts in its own credit story.
Judo is now forecasting its fiscal 2026 cost of risk at A$116 million to A$122 million, citing three exposures in separate sectors. The lender said loans at least 90 days overdue or impaired will likely hit about 3% of gross loans and advances. Judo lowered its fiscal 2026 pretax profit guidance to A$163 million-A$169 million, down from its earlier view of A$180 million-A$190 million.
Judo CEO Chris Bayliss said, “Recent credit outcomes have been driven by a small number of customers, who we are actively working with.” The lender is sticking to its forecast for a second-half net interest margin above 3.2%. It also kept its outlook for fiscal 2027 pretax profit in the A$210 million to A$220 million range.
J.P. Morgan (NYSE:JPM) analyst Andrew Triggs called the borrower-specific explanation “only limited comfort.” He said analysts would likely reduce Judo’s fiscal 2026 earnings forecast by 8% and slash 2027 estimates by 15%. ABC News
CBA lifted its credit buffer in May, adding A$200 million to collective provisions and recording A$316 million in loan impairment expense. Credit provisions totaled A$6.5 billion at March-end. Corporate troublesome and non-performing exposures also climbed to A$6.5 billion, or 0.94% of committed exposure, up from A$6.1 billion and 0.90% in December.
CBA CEO Matt Comyn said high prices and rates are likely “to weigh on household spending and business activity.” Business lending was up 12.5% over the year to March, outpacing system growth at 1.2 times. Judo’s warning brings the cost of risk from faster business-loan growth back into view ahead of CBA’s results on Aug. 12.
CBA finished Thursday at 26.33 times trailing earnings. That’s a 47% premium over the average 17.90 times for NAB, ANZ and Westpac. Even a small drop in that multiple can wipe out more equity value than a hard selloff in a smaller bank.
Australia’s jobs numbers for May didn’t offer a clear signal. Employment was up 40,300, and unemployment slipped to 4.4%. But hours worked fell 1.1%. Job vacancies dropped 2.1%. The Reserve Bank of Australia has hiked rates three times this year, taking them to 4.35%. Underlying inflation hit 3.6% in May.
State Street (NYSE:STT) economist Krishna Bhimavarapu said the jobs rebound “allows the RBA to remain on an extended hold,” but persistent inflation means there’s still a risk of another hike later this year. CBA’s first price marker on Friday lands at Thursday’s low of A$162.64. The next company update is due with full-year results on Aug. 12. Reuters
