Judo Capital Holdings shares collapsed by approximately 40% in early trading on Thursday after the Australian lender issued a stark profit warning.
The ASX-listed bank revealed that three significant loans across different sectors had deteriorated, forcing a sharp increase in specific provisions and a downward revision to its full-year earnings outlook.
The stock fell to 93 cents in early afternoon trade, wiping out roughly $400 million from the company’s market capitalization.
The stock fell to 93 cents in early afternoon trade, wiping out roughly $400 million from the company’s market capitalization.
The repricing reflected investor concern over the scale of the unexpected credit losses and the potential impact on the lender’s capital adequacy and future profitability.
Judo Capital, which focuses on asset finance and leasing, had previously maintained a stable outlook.
The sudden deterioration in loan quality across several sectors suggests broader stress in its client base, raising questions about the resilience of its underwriting standards and the health of the industries it serves.
The profit warning marks a significant setback for the lender, which has been navigating a challenging macroeconomic environment.
Investors will be closely monitoring the company’s response to the credit losses and any potential changes to its lending strategy or capital management approach.