Fund Manager Summary
The fund managers believe that Judo Capital Holdings Ltd presents a compelling investment opportunity due to its significant growth potential in the SME market and its current low market share of only 2%. In their opinion, this growth is further supported by Judo's superior service proposition. They note that the company has margin upside as net interest margins are at cyclically depressed levels, with opportunities to enhance cost to income ratios through productivity improvements. Despite recent underperformance, Judo is viewed as highly attractive from a valuation perspective, especially when compared to major banks trading at substantial premiums to book value.
Source: Trading View
Commentary From The Managers
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Pendal Group
27 Oct 2025
$1.76
Summary
- Pendal Group notes that Judo Capital (JDO) has delivered a solid AGM update.
- After a flat period of 6-12 months, loans are now growing more consistently, with 1Q annualising at 16%.
- Deposit growth has been even stronger, up 25% annualised, as JDO transitions to a cheaper, more stable funding base.
- Margins are improving, with lending spreads stable at 4.4%.
- Deposit spreads have improved from 99bp in 2H25 to mid-80s in 1Q.
- All of these developments are in line with guidance and consensus, providing reassurance compared to prior trends and market competition.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
27 Oct 2025
$1.76
- Pendal Group notes that Judo Capital (JDO) has delivered a solid AGM update.
- After a flat period of 6-12 months, loans are now growing more consistently, with 1Q annualising at 16%.
- Deposit growth has been even stronger, up 25% annualised, as JDO transitions to a cheaper, more stable funding base.
- Margins are improving, with lending spreads stable at 4.4%.
- Deposit spreads have improved from 99bp in 2H25 to mid-80s in 1Q.
- All of these developments are in line with guidance and consensus, providing reassurance compared to prior trends and market competition.
Summary
Antares Capital
30 June 2025
$1.57
- Judo Capital Holdings Ltd. (JDO) provided a market update in May regarding lending growth.
- It is unlikely to meet previously guided lending growth targets.
- The company cited US-instigated trade confusion as a factor impacting its performance.
- Following this update, shares weakened due to the implied downgrade in long-term targets.
- Antares Capital is reviewing its position in light of continued weak data released in June.
Summary
Yarra Capital Management
13 June 2025
$1.57
- Yarra Capital Management initiated a position in Judo Capital Holdings Ltd due to its significant growth potential in the SME market.
- Judo currently holds only 2% market share, indicating strong potential for market share growth.
- The fund manager believes Judo's superior service proposition will support its market share gains.
- Judo has margin upside, with net interest margins currently at cyclically depressed levels.
- There is potential to improve cost-to-income as productivity opportunities are rolled out.
- The business is viewed as highly attractive from a valuation perspective, trading around book value.
- This valuation is particularly appealing compared to major banks, which are trading at large premiums to book value.
Summary
Datt Capital
13 June 2025
$1.57
- Judo is a hold for Datt Capital.
- Judo is a specialist SME lender.
- During periods of economic uncertainty, the SME sector tends to suffer disproportionately.
- Judo's more concentrated loan book compared to major financiers presents a high-risk proposition.
- Challenges around costs of funding could impact Judo's margins.
- Thus, this investment remains a hold for Datt Capital.
Summary
Tyndall Asset Management
31 May 2025
$1.39
- Judo Bank underperformed for the month following FY26 guidance below market expectations.
- Lower loan book growth led to an anticipated 50% NPAT growth for FY26, compared to the market's expectation of 60%.
- Despite earnings downgrades, Tyndall Asset Management maintains that the investment thesis remains unchanged.
- The company is at an inflection point where operating leverage is expected to drive significant earnings growth over the next 5 years.
- Currently trading at 13x forward earnings, indicating that the market may not fully reflect this growth opportunity.
Summary
Yarra Capital Management
31 May 2025
$1.39
- Judo Capital (JDO) underperformed in May due to a modestly negative trading update.
- The update reiterated guidance but moderated loan book size expectations.
- FY26 guidance provided was slightly below consensus.
- Higher loan book run-off was a key feature in the guidance downgrade.
- This run-off is partly attributed to proactive book management undertaken in 1H25.
- Despite the underperformance, Yarra Capital Management remains constructive on Judo’s medium-term opportunity.
- Yarra Capital Management added to their existing small position post trading update.
- Valuation support is seen as Judo is currently trading around book value.
Summary
Yarra Capital Management
31 Aug 2024
$1.67
- Judo Capital Holdings (JDO) has outperformed following its FY24 results release.
- Reported a 20% increase in gross loans and advances (GLA).
- Underlying profit increased by 2%.
- Guidance for FY25 upgraded, expecting 15% growth in EBIT.
- Ongoing market share gains are anticipated.
- Term deposit market competition is lowering, creating funding opportunities for Judo.
- Yarra Capital Management continues to hold a position in Judo due to these factors.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
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Last Updated: 27 Oct 2025
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Frequently Asked Questions
Who is investing in Judo Capital Holdings Ltd (ASX:JDO)?
Fund managers including Yarra Capital Management, Datt Capital, Antares Capital, Tyndall Asset Management and Pendal Group have invested in Judo Capital Holdings Ltd (ASX:JDO).
Why do fund managers invest in Judo Capital Holdings Ltd?
Fund managers are investing in Judo Capital Holdings Ltd due to its significant growth potential in the SME loan market, where it currently holds only 2% market share. The company's superior service proposition positions it well for market share expansion. Additionally, Judo has margin upside as net interest margins are at cyclically low levels, and there are opportunities to enhance cost efficiency. With its recent underperformance bringing its valuation to around book value, Judo is considered highly attractive compared to major banks trading at premiums.
What happened to Judo Capital Holdings Ltd (ASX:JDO)?
Fund managers, including Pendal Group, are investing in Judo Capital Holdings Ltd due to its recent solid AGM update, indicating a consistent growth in loans at an annualized rate of 16% and a significant 25% growth in deposits. The company is transitioning to a more stable funding base, which is enhancing margins with stable lending spreads at 4.4% and improving deposit spreads. These developments align with market guidance and consensus, providing reassurance amidst previous trends and competition.