Judo Bank (ASX:JDO) reported a 34% year-over-year increase in pre-tax profit to $168.1 million in FY26, driven by robust lending growth, margin expansion, and significant efficiency improvements. The bank's stock rose 9.02% to $1.00 following the presentation. CEO Chris Bayliss acknowledged the challenges, noting a 'disappointing specific provision increase in Jun-26' while emphasizing confidence in the business model and competitive advantage.
Financial Highlights
Judo Bank's gross loans and advances grew 18% to $12.2 billion, while deposits increased 24% to $14.7 billion. Net interest margin improved 20 basis points to 3.13%, the highest among listed Australian deposit-taking institutions. The cost-to-income ratio fell 710 basis points to 45.3%, also the lowest among peers.
Outlook
For FY27, management expects net interest margin to remain broadly stable at around 3.13%, with term deposit margins normalizing toward the 80-90 basis point range. The bank aims to continue improving its cost-to-income ratio, with a focus on customer-facing roles and strategic investments in new products and productivity enhancements.