Explore the latest developments concerning Judo Bank tanks.
Judo Bank tanks as loan losses reveal economy’s rapid decline
Once investors get past a 45 per cent share price drop, they’ll worry about how three loans in entirely different sectors and states could go bad all at once.
Slowing household credit growth is the biggest story in Australian banking.
The federal budget has hit investor loans, house prices are no longer soaring, auction clearance rates are soft, and competition among the banks for new loans and refinancing is reasonably strong. These factors could result in household credit growth halving, underpinning the $11 billion short-the-banks thesis.
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Aussie bank plunges in value as loans suddenly go bad: 'Very rapidly'
An Aussie bank has seen the valuation of its business on the Australian stock exchange nearly halve in a single trading day. Judo Bank's share price plunged on Thursday after revealing bad debts to the market.
The bank, which lends to small and medium businesses, said three loans had gone bad in recent weeks, stoking concerns about the state of the economy and sending jitters through investors. One of the loans was to a business that had suddenly entered voluntary administration which caught the bank off guard as the business "deteriorated very rapidly".
"Judo's cost of risk has been impacted primarily by specific provision increases for three exposures across different sectors that have recently emerged," the bank said in an update to the ASX.
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