Australian (ASX) Stock Market Forum

JDO - Judo Capital Holdings

Hey @frugal.rock how about your opinion on the rather strange price movements before and after the recent news.

Hey @frugal.rock how about your opinion on the rather strange price movements before and after the recent news.

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Well, clearly, everyone jumped off on the Citibank downgrade, which just happened to be the day before Judo released their improved half year figures.
One shouldn't question the timing or the fact that a director was with Citi for a while. Totally irrelevant.

Actually there has been a large amount of price movement.
On the Ann yesterday it dropped to $1.12 and at the high it got to $1.27.

But both days closed $1.2
Strange times.
On A day the major banks dropped 2% JDO rose 4% so there is definitely momo.

Lets hope everything is realistic and based on a sound foundation. If this is the case then yea at some time they should start paying dividends.
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Judo Bank receives S&P credit rating upgrade to BBB/Stable/A-2
Judo Capital Holdings Limited (ASX: JDO) (Judo) announced that its main operating entity and wholly owned subsidiary Judo Bank Pty Ltd (Judo Bank) has today received an upgrade to its S&P issuer credit rating to BBB/Stable/A-2, from BBB-/Positive/A-3. The upgrade to Judo Bank’s issuer credit rating supports the Bank’s comprehensive funding strategy and will further enhance the Bank’s existing strong access to funding. The upgrade to Judo Bank’s issuer credit rating follows S&P’s review of the Australian banking sector which concludes that industry wide risks have reduced.
from the OZ

The focus has turned to Macquarie and Westpac as possible buyers of Judo Bank.
Sources say Macquarie has been running the numbers on Judo for a potential acquisition of late, while there’s speculation that Judo was recently on the mind of Westpac boss Peter King.

Judo has top level technology at a time when Westpac needs to spend in the area, and it would be an easy way to grow its small and medium customer base. Westpac could run it with a far cheaper funding.

Most of Judo’s customers are businesses rejected by the top four banks or those who want a lender with a more old-fashioned relationship focus

Westpac might run it as a separate entity and keep the aspects of Judo that make it unique.

Then there’s Bendigo Bank to think about, with some wondering why it still hasn’t carried out a major acquisition since ANZ’s $4.9bn move on Suncorp.

Many believe it’s a no brainer: Bendigo should buy Judo in a scrip merger deal as a way to grow and gain new technology. But there’s still no word on that front yet, though its board is certain to have at least been giving it serious thought.

Macquarie is becoming a far more dominant force in the lending world, taking on the top four Australian banks to grab market share in mortgages.

But much attention is with the regional banks, with suggestions that Bendigo Bank may be closing in on the $1bn-plus Judo Bank. Bendigo is under pressure to grow to compete with the major banks, and an acquisition of Judo would provide not only scale but a sizeable entry into the business lending market

Judo was co-founded by outgoing chief executive Joseph Healy in 2016. It listed successfully in 2021 with a $2.3bn market value, equating to 1.7 times its book value.

It’s been tough going since then as interest rates rose, with its capital costs higher than those of Bendigo Bank.

Those costs would fall by as much as 150 to 200 basis points in a merger, and even more so under Westpac’s ownership – from over 6 per cent to 3 per cent...
The update from JDO didn't go down too well this week.

A significant tick up in bad debts has spooked the market, even though management say no need to worry.

It will be interesting to see where the share price goes from here.