Judo Capital (ASX: JDO) expects recovery in NIM in 2HFY24

4 min read | July 01, 2024 08:32 PM AEST | By Team Kalkine Media

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Judo Capital (ASX: JDO) expects recovery in NIM in 2HFY24 — Image source: Freedomz, Shutterstock.com

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Highlights

Judo Capital is an ASX-listed company which offers financial services to small and medium enterprises

In 1HFY24, JDO’s interest income increased 79% YoY to AUD 432.2 million

In the quarter ending March 2024, household wealth increased for the six quarter by 2.7%

Judo Capital Holdings Ltd (ASX: JDO) is an Australian bank which primarily offers financial services to small and medium enterprises (SMEs).

In the first half of the financial year 2024 (1HFY24), interest income of JDO jumped around 79% YoY to AUD 432.2 million, driven by an increase in gross leasable area (GLA), despite witnessing a fall in net interest margin.

In 1HFY24, net banking income grew by 21% YoY to AUD 200 million and net profit after tax jumped 27% YoY to AUD 45.9 million.

Growth prospects for banking sector stocks

The data released by the Australian Bureau of Statistics (ABS) on 27 June 2024 indicated that in the quarter ending March 2024, household wealth increased for the six quarter by 2.7%. During the reported period, total demand for credit stood at AUD 101 billion, backed by private non-financial businesses and households.

According to the latest data released by the ABS, job vacancies declined by 2.7% in May 2024, following a drop of 6.2% in February 2024.

Data related to the fall in job vacancies, lending data and household wealth bode well for banking sector stocks.

Recent business update

According to an ASX update released on 14 June 2024, the company notified that FIL Limited, and its related companies increased their stake in JDO from 5.67% to 7.49% on 12 June 2024.

On 11 June 2024, the company informed that it replaced CSR in the S&P ASX 200 index, effective from 20 June 2024.

Outlook

In the second half of FY24, the company expects to deliver a net interest margin in the range of 2.70% to 2.80% and net interest margin in the range of 2.85% to 2.90%.

In FY24, JDO’s profit before tax is expected to fall in the range of AUD 107-112 million. In FY25, the company aims to achieve profit before tax growth of 15% or higher.

Share performance of JDO

JDO shares closed 0.79% lower at AUD 1.25 apiece on 1 July 2024. In the last one year, JDO’s share price has jumped 5.49%, and in the last six months, it has increased by 25%.

The 52-week high of JDO is AUD 1.44, recorded on 11 March 2024, and the 52-week low is AUD 0.793, recorded on 23 October 2023.

JDO Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 01 July 2024. The reference data in this report has been partly sourced from EODHD/Others.

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