Judo Bank (ASX:JDO) Shares down on May Update

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Judo Capital Holdings [ASX:JDO] shared its monthly loan book update for the month of May this morning.

Shares fell by 2.15% by the afternoon, sitting at $1.82 at time of writing.

The bank is down 14.5% year-to-date, although, the bank staged a resurgence of sorts, up 14% in the last month.

Having said that, the broader market fell on Tuesday following a hawkish decision by the Reserve Bank to raise the cash rate by 0.5%.

asx:jdo stock prices chart


Source: Marketindex.com

Judo’s May Loan Book

JDO’s reported its closing balance for gross loans and advances (GLAs) of $5.74 billion for the month of May — $180 million higher than the GLAs figure for April, which was $5.56 billion.

Judo reported that, compared with its June 2021 closing GLAs total of $3.2 billion, the May 2022 total rose 63.1%.

Judo’s Deputy CEO and CFO Chris Bayliss told the public that the self-described challenger bank ‘achieved lending growth of $180 million for the month of May’ and that it ‘had over $20 million of new loans settle on 1 June, which were expected to settle on 31 May’.

Judo is required to provide monthly balance sheets until 30 June, the closing of its prospectus forecast period.

In February, the SME bank shared its half-year results.

1H22 gross loans were up 37.8% to $4.85 billion.

Net interest income was up 48.5% to $73.5 million.

However, Judo reported a statutory net loss of $16.1 million, down from a modest net profit of $1.9 million in 2H21.

How does JDO share price fare as inflation rises?

Looking ahead for Judo’s immediate future, Chris Bayliss said:

We remain confident in achieving our prospectus forecast for GLA of $6.0 billion by 30 June 2022, underpinned by our current lending balance and our strong pipeline of approximately $1.1 billion.’

The company shared last month that rising inflation would serve as a boost to business.

This thesis was shared by Kate Howitt, portfolio manager of Fidelity Australian Opportunities Fund.

She also argued that Judo’s focus on the small- and medium-sized enterprise (SME) sector is shrewd, as it stays away from the highly competitive mortgage sector.

Howitt thinks Judo provides a direct leverage to rising rates as its funding costs are anchored by the RBA’s fixed-rate term funding facility.

Now, if you’re interested in fintechs and want to find out more, I suggest reading through our latest fintech report for 2022.

It profiles three promising fintechs, including a stock with a healthy balance sheet wishing to shake up the staid banking sector.


Kiryll Prakapenka,
For Money Morning



About Kiryll Prakapenka

Kiryll Prakapenka is a research analyst focusing on investigating the biggest trends in investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from the University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding…

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