SYDNEY, June 27, 2026, 09:05 AEST
- Judo closed Friday at A$0.88, off 3.83%. The stock had slumped almost 40% in a single day earlier.
- The A$119 million midpoint for FY26 cost of risk is about 72% of the new FY26 pretax profit midpoint.
- Monday is a test for whether the three bad loans get written off as a one-time loss or force a shift in SME credit risk pricing.
ASX is closed for normal cash trading on Saturday. Regular trade runs Monday to Friday, 9:59 a.m. to 4 p.m. in Sydney. Judo Capital Holdings Limited ASX:JDO heads into the weekend after shares fell again on Friday. TradingHours
Judo said in a June 25 ASX filing its FY26 cost of risk will land between A$116 million and A$122 million. That’s mostly due to higher provisions tied to three borrowers. It now sees loans 90 days past due or impaired at about 3% of gross loans and advances at June 30. Judo also cut FY26 pretax profit outlook to A$163 million to A$169 million, with FY27 pretax profit guidance at A$210 million to A$220 million. Chief Executive Chris Bayliss said “recent credit outcomes have been driven by a small number of customers,” calling the update “nevertheless disappointing.”
Sharper number is the ratio here. Judo’s fresh A$119 million cost-of-risk tag lines up at around 72 cents per A$1 of projected FY26 pretax earnings, using midpoints. That’s the credit drag investors have to weigh against a bank still calling for gross loans and advances of A$14.6 billion to A$14.7 billion by June 30.
Judo shares dropped A$0.04 to close at A$0.88 Friday, off 3.83%. The stock traded in a range from A$0.87 to A$0.95. Investing.com put Judo’s market cap at A$986.73 million, which is roughly 5.9x the midpoint of its FY26 pretax profit guidance and 4.6x the midpoint for FY27. This isn’t a P/E, but it shows how much the market cut the value of Judo’s earnings after the credit update. Investing
Judo Bank shares plunged at the open Thursday, falling 23.7% to A$1.17, Market Index reported. By 10:40 a.m. AEST the drop had deepened to 46%, sending the stock down to A$0.83 after the update rattled investors’ view on the bank’s growth story. Market Index
Morningstar’s Nathan Zaia kept his A$1.60 fair value call, but lowered his profit estimates for FY26 and FY27 by 9% and 13%. Zaia said the provisions don’t look like a sign of a bigger system issue, but flagged the main question is “whether they are pricing risk appropriately.” Morningstar
The selloff is getting more attention than just Judo’s latest trading update. Investors look to Judo, a pure-play SME lender, for clues on borrower stress because its arrears and provisions often show trouble the big banks might not reveal as clearly.
Sellers had room to move as the SME outlook softened. The May Business Risk Index from CreditorWatch, out June 25, showed a jump in payment defaults and more ATO tax debt defaults turning up, despite steady insolvency numbers. “Credit risk in Australia is becoming more concentrated, more fast-moving and more behavioural,” said CreditorWatch CEO Patrick Coghlan. CreditorWatch
Judo faces a critical week convincing investors the three exposures are tied to individual borrowers, not a broader mispricing in its loan book. The bank’s figures still show net interest margin topping 3.2% for the second half and cost-to-income coming in under the first half’s 48.5%. But credit quality is driving the share price conversation now.
Judo said its common equity tier 1 ratio should be around 12.4% at June 30. The bank is shifting to a management CET1 target range between 11.0% and 12.0% in normal settings. The next company event is the FY26 results, set for Aug. 18.
