• Judo executing clear and simple strategy, on track for significant operating leverage in 2H25
• Focused on balancing growth and economics in response to heightened market volatility
• FY25 guidance updated to reflect near-term impacts

Judo Capital Holdings Limited (ASX:JDO) ('Judo Bank', 'Judo' or 'bank') today provided an update on its year-to-date trading performance and outlook. Judo is executing its clear and simple strategy and remains on track to achieve significant operating leverage in 2H25 and beyond as it progresses towards its at-scale ROE in the low-to-mid teens. In the near term, in response to heightened volatility in the operating environment, Judo is focused on achieving an appropriate balance between growth and economics. Judo has updated its FY25 guidance to reflect these near-term impacts. The bank has achieved several operational highlights over the March quarter, including continued recruitment of experienced relationship bankers and expansion into new regions. Judo's relationship-led customer value proposition continues to resonate with SMEs, demonstrated by a market-leading net promoter score of +51. In March, Judo completed its migration to a new core deposit platform, providing greater flexibility to broaden its deposit product suite. Financially, Judo's gross loans and advances (GLA) at 31 March were $11.7bn, with net growth for Q3 being subdued due to normal seasonality and higher run-off. Margins on new lending in Q3 remained strong at 4.6%, contributing to an improved Q3 blended lending margin of 4.3%. Term deposit (TD) balances grew to $9.2bn as at 31 March, with the blended cost of deposits in Q3 consistent with Judo's expected through-the-cycle range. As a result, net interest margin (NIM) for Q3 was within the targeted 2H25 range of 2.90 - 3.00%. However, the significant volatility in the operating environment in recent weeks has driven a disconnect between swap rates and headline term deposit rates, with TD margins currently above the bank's through-the-cycle range. Operating expenses continued to be well managed in Q3, with cost growth slowing from 1H25 as expected. Cost of risk in Q3 was impacted by an increase in specific provisioning for a small number of exposures in vulnerable sectors. Judo continues to maintain a strong capital position with a CET1 ratio of 13.8% as at 31 March. Looking ahead, Judo now expects GLA at 30 June 2025 to be between $12.4bn and $12.6bn, lower than previous guidance due to market uncertainty, slower ramp up of warehouse lending, and the need to balance growth and economics. The bank continues to target NIM in 2H25 at the upper end of 2.90 - 3.00%, with an exit NIM of 3%. Further cash rate reductions before 30 June will impact Judo's exit NIM, but this impact is expected to be largely temporary. Judo now expects FY25 cost of risk expense to be higher than FY24 due to the increase in specific provisioning in Q3. Overall, Judo continues to target FY25 PBT growth of 15% vs FY24, and in FY26, assuming stable economic conditions, the bank is aiming to deliver 50% PBT growth as it benefits from significant operating leverage.

Judo now expects GLA at 30 June 2025 to be between $12.4bn and $12.6bn. The bank continues to target NIM in 2H25 at the upper end of 2.90 - 3.00%, with an exit NIM of 3%. Judo now expects FY25 cost of risk expense to be higher than FY24.

In FY26, assuming stable economic conditions, Judo is aiming to deliver 50% PBT growth as the bank benefits from significant operating leverage.