Good morning, and welcome to the Judo Bank result briefing for the full year ended thirtieth of June, twenty twenty-four. My name is Andrew Dempster. I'm the General Manager of Investor Relations for Judo. I'd like to begin by acknowledging the traditional owners of the land. Our result material was lodged with the ASX this morning, and the material is also available on the investor section of the Judo website. We're very pleased to be joining you today for our first result video webcast. For today's agenda, we'll first hear from our CEO, Chris Bayliss, who will provide an update on our performance and strategy. Our CFO, Andrew Leslie, will then discuss our financials in detail, and then Chris will return to discuss the operating environment as well as the outlook. After the formal presentation, there'll be time for Q&A. On that note, I'll hand over to Chris. Thanks, Andrew. Thank you, and good morning, everyone. I really am delighted to be presenting my first set of results as CEO this morning. It's been six months now since I took on this role, and as a co-founder with Joseph and David, we'd like to think it was a textbook succession event, and as a co-founder, this is not a job for me. I'm passionate about this company and the difference it can make to the success of SMEs throughout Australia, and I couldn't be happier with the progress we're making. Since my appointment, I've been repeatedly asked, what changes will I make, and the honest answer is just to continue scaling the bank we have now built, and I've been involved in every major strategic decision since Judo was founded. We're a bank built for purpose, to be Australia's most trusted SME business bank, and we are a unique, pure-play specialist. Banking as it used to be, banking as it should be. And it really is a very simple model. Highly trained and experienced bankers, empowered to use their judgment to make decisions quickly and in turn, build an enduring relationship with their customer, anchored off trust. But having a clear purpose and strategy is one thing. The reality of actually how to build a bank is something else. There was no playbook. No one had done this before, and the journey is certainly not easy. It involved a lot of trade-offs, traversing the intersection between a clear purpose and CVP, an investment thesis to raise capital, and getting a banking license. For example, balancing tactical and strategic investments, particularly in technology, to manage the path to profitability and create a compelling thesis to raise AUD 1.5 billion in capital. Launching as a non-bank back in 2018 also meant using warehouse funding, which restricted us to big bank commoditized lending, and certainly not the sweet spot we play in today. And similarly, becoming an ADI and gaining access to the deposit market, which was key for our ability to scale, meant complying with all of the ADI prudential standards of a big bank, and initially, only using the price lever to gather deposits. But today, these challenges are behind us. We have now been a licensed bank for five years. Our loan book exceeds AUD 10 billion. Our deposit funding is over AUD 8 billion. We've fully Term Funding Facility, and we've been included in the ASX 200 index. We have raised all of our equity capital, and we're now very close to completing the transition of all our strategic and scalable tech platforms, so the challenges of building are over, and we're now finally able to run and scale the bank we dreamed of eight years ago, and scale opens up an array of new opportunities that will support continued above-system growth and progress towards our at-scale metrics. Turning now to the result, we've delivered strong performance in line or better than the guidance we provided throughout the year. Our lending growth has continued at multiples of system, with GLAs at the top end of our guidance, balancing growth, margins, and risk. We've continued our regional expansion, opening four new locations and adding 21 bankers during the year, and we've actually added another four locations since the end of June. Our NIM is at the top end of our guidance, and we've now, of course, completely Term Funding Facility. pleasingly, our CTI, our cost-income ratio, at 55%, was at the lower end of our guidance as we prudently managed our cost base and the structural changes we, of course, announced some months back. Cost of risk is 70 million, was however, at the top end, but in line with the expectations we set in May, and we're now seeing positive signs that arrears are flattening, if not reducing. Lastly, our profit was comfortably within our guidance range. Later in the presentation, after Andrew has spoken, I do want to discuss the inherent benefits of scale in our business Term Funding Facility has, of course, given us a significant tailwind in terms of profitability and capital, but it has unfortunately masked our underlying operating leverage that will become very clear in the next few years. And so while the headline PBT growth may appear flat, we're seeing material uplift in productivity, not least flat year-on-year FTE, while our banker numbers and locations are now increasing and will continue to do so. A frequent question I've been asked a lot since my appointment is, what type of CEO am I? And the answer is, one, is someone who's passionate about the service profit chain, passionate about our culture, and because our culture really is our secret sauce. Having highly engaged employees provide great service for customers, those customers tell other customers, and all this delivers great returns for our shareholders, and it was my reason for Judo. When we talk about a company free of legacy, the biggest legacy we didn't have was legacy people. We were able to recruit people passionate about our purpose, passionate about SMEs, and people who are A players in their field of expertise, whether that be in finance, risk, technology, legal, marketing, or HR. However, most importantly, for our customer value proposition, we have amongst the best relationship bankers in the country. Those bankers are empowered to build enduring relationships with their customers, and that is banking as it used to be, banking as it should be. My personal goal is to build and lead the company I've always wanted to work for, where the service profit chain is humming and fructifies. Highly engaged staff, which we measure weekly, not annually, delivering an industry-leading NPS, driving multiple of system growth, and this is translating into the scale benefits I mentioned on the last slide. The ultimate test of the service profit chain is, of course, ROE over the long term, and we believe this continued focus on our people is the biggest lever we have to deliver our at-scale ROE target. As I said at the outset, our strategy remains clear and simple, and I put it here to reconfirm my personal commitment to it. We're focused on solving what we believe is a market failure in the provision of credit to SMEs. Our core competitive advantages are our relationship-based approach, using judgment and speed through the best business bankers in the country. The strategic enablers of our business are a culture of empowerment, DNA of execution, and the powerful scale benefits. And as we grow, we will leverage our capabilities into new adjacent opportunities, fully aligned with our core franchise. Engagement, NPS, and ROE are our key measures of success. A question I know is on the minds of a lot of investors is the competitive advantage, as the big banks have clearly stated that they have fallen back in love with SMEs. We've also seen the emergence of private credit, although this actually provides us with an opportunity that I want to talk to later. There's no question competition has increased, but it is largely in specific segments where major banks have doubled down on their existing strengths. For example, there's strong competition in the over $10 million well-secured lending at one end of the spectrum, as well as low doc, low relationship lending at the other end. And the private credit firms are mostly focused on high-risk, high-reward lending and specialize in that. Whereas Judo's core segment of judgment-based lending to SMEs, who want to borrow between, say, $2 million and $10 million, is a segment where incumbent major banks do not appear to be investing. Why? Because relationship bankers are expensive, and they run contrary to the big banks' focus on cost out and automation or centralization. And I would remind everyone that despite our rapid growth, we are still only 2% of the SME system, with plenty of growth ahead of us. By focusing on our sweet spot, we believe we have the right balance between growth, margins, and risk to maximize ROE. As you can see, we've now reset our lending margins since the period of ultra-low funding costs in FY 2023. Competition for SME lending using price as a strategy has definitely eased, as we always said it would, and we're now back to our core thesis that drives NIM of over 3%. Andrew will talk to this in more detail as he unpacks the trajectory of NIM later in today's presentation, but importantly, we have not adjusted our risk appetite to achieve higher margins. Risk grades and security have remained stable, and so with our core business humming and our increasing scale, our focus is now on driving growth and economics. On this slide, I've outlined the four broad areas of opportunity that we will continue to evaluate to unlock growth and ROE. First, regional expansion, which has been a core element of our strategy now for 18 months. We now have 14 regional locations, with four new locations opened in the past year, and we aim to open over 10 locations over the next 12 months. Second, adjacent segments. We have several options. We are progressing a warehouse lending business to support private credit and NBFIs that lend to SMEs, given the very attractive structure and economics of this market, which leverages our core capability of assessing SME credit and allows us to actually turn a competitor into a customer. Third, adjacent SME products. Our core product set today meets the debt needs of about 80% of SME customers. We do, however, want to close the gap on the remaining 20% and also build out our other operating income line. And lastly, on specific ROE drivers, we continue to assess opportunities to drive productivity faster, improve our CTI, and manage our capital and risk-weighted assets. I said at the start of the presentation, I'm often asked what I will do differently. I'm also asked what will keep me awake at night, and the honest answer to the latter is how we now effectively sequence and prioritize all of the opportunities available to us as the build phase is well and truly over. On that note, I'll now hand over to Andrew to run through the financials. Thank you, Chris, and good morning, everyone. This year, Judo delivered another strong financial performance with statutory profit before tax of $104 million, including one-off costs for CEO and succession and restructuring, which we flagged back in May. Excluding the one-offs, our underlying profit before tax was $110 million, up 2%, driven by strong growth in the loan book and ongoing investments. During the year, we continued to execute on the transition of our funding stack. We successfully repaid the TFF, and we achieved this largely from growth in term deposits. This increase in deposits saw NIM moderate throughout the year. And while headline profit growth was modest, we have significant underlying operating leverage in the business, which Chris will unpack later in the presentation. In terms of asset quality, ninety days past due and impaired, although up year on year, has improved since the March quarter and is now flattening. And overall, our provisioning levels remain strong. As Chris discussed earlier, we've demonstrated that as a specialist SME lender, we are agile and can shift our focus rapidly to balance growth, economics, and risk. Our loan book closed at AUD 10.7 billion for the year, at the top of our guidance range. This represents a AUD 1.8 billion-dollar increase, or three times system growth. While there was some variability in front book lending margins due to mix, the margin over the second half was on average in the mid-400s over swap. And this level supports our at-scale NIM target of above 3%, which is based on an average blended lending margin of 4.5%. Importantly, in the month of June, which is our highest origination month of the year, we achieved front book lending margins at this level. We also finished the year with a record AAA pipeline of AUD 1.8 billion, at an average margin of 4.5%. And I'd also note that the spot pipeline margin has now increased to above 4.6%. So this all sets us up well for FY 2025. Moving now to NIM. FY 2024 NIM was 2.94%, which was four basis points above the top end of our guidance range for the year. The second half of 2024 NIM was 2.85%, also above our guidance range for the second half. The primary drivers of NIM over the second half were largely in line with our guidance. Firstly, deposit costs continued to normalize. The cost of new deposits averaged ninety basis points for the half, which was at the top of our guidance range, and the average blended margin was eighty basis points for the half. Second, the TFF was a drag on NIM of thirty-nine basis points. Second half was the period with the greatest NIM impact, given we repaid most of the TFF towards the end of the period. Thirdly, we achieved a six basis point benefit across other funding costs, which was largely optimizing our warehouse capacity and terms. Fourthly, lending margins were a tailwind, as we saw improvements in front book margin and proactive management of existing customers. Lastly, treasury management. So this was the main driver of our performance versus guidance. During the half, we saw benefits from improved yields on the treasury book and close management of liquidity. As planned, we materially reduced the level of liquids we held as we repaid the TFF. Let's turn now to the outlook for NIM. June 2024 was the trough point for NIM, and we expect NIM to gradually improve through the course of 2025, with a June 2025 exit NIM of 3%. We reaffirm our FY 2025 guidance for NIM of between 2.8% and 2.9%, and also now provide half-on-half guidance, being 2.75%-2.85% for the first half and 2.9%-3% for the second half. Now, as we've mentioned previously, there will be a drag on NIM from the TFF in the first half of 2025, roughly half the drag that we experienced in second half 2024. While the TFF was fully repaid in June 2024, second half NIM received a tailwind with around AUD 600 million of TFF funding benefit. There are a number of high conviction drivers that support our NIM trajectory in FY 2025. First, liquidity will be a material benefit, as the level of liquids we need to hold has reduced significantly following repayment of the TFF. Second, we expect a continued tailwind from the ongoing impact of higher front book margins on new loans, as well as continued earn through of higher margins on the back book. We are forecasting our blended lending margin will increase towards 4.2% for FY 2025. Third, with the TFF now repaid, we expect to benefit from relatively lower cost deposits becoming a larger portion of our funding mix. We are assuming the cost of new TDs trends to the low end of our 80-90 basis point expected long-run average for FY 2025. And fourthly, we will see some continued benefit from optimization of wholesale funding. All up, these drivers will support an exit NIM in June 2025 of 3%. Over the year, we saw a material shift in our funding mix towards our at-scale targets. Strong customer appetite for our term deposit products, coupled with repayment of the TFF, saw deposit funding increase from 50% of our funding stack in June 2023 to 64% by June 2024. So that's above guidance, which was 60%. We're very pleased with the performance of our deposit franchise. Retail TDs represented 76% of deposit growth in FY 2024, supported by strong rollover rates, which are now consistently in the mid- to high-60s. Going forward, deposits will remain our primary source of funding while we continue to optimize our wholesale funding sources post repayment of the TFF. Moving now to operating expenses. Underlying OpEx, excluding non-recurring costs, grew 13% over the year, largely due to higher employee, IT, and amortization costs. The higher employee costs were driven by higher average FTEs for the year. Of note, however, is that growth in average FTE slowed significantly in the second half, with non-customer facing areas approaching maturity. FTEs of 543 at June 2024 was flat compared to June 2023, following the restructure announced in May. Higher IT expenses were primarily due to an increase in IT licensing fees for new platforms implemented during the year. Amortization expense saw a step up during the year, increasing to 12.1 million. Now, this was driven by two key components: one, the commencement of amortization on new platforms we implemented during the year, which shifted from WIP in use on the balance sheet, and two, a reduction in useful life of some existing platforms due to be replaced, which saw an acceleration of amortization. We expect the FY 2025 cost-to-income ratio to be broadly stable, with that delivered this year as we continue to prudently manage costs. FTE growth will largely focus on new bankers to support our growth agenda. Amortization and IT expenses will step up again in FY 2025 to reflect the transition to our at scale platforms, with other expenses to increase at inflation type levels. Turning now to asset quality. Our impairment expense for the year was AUD 70.1 million, which equates to 72 basis points of GLAs. This was driven by growth, as well as continued seasoning of the book and the impact of more challenging operating conditions for SMEs. Provisioning levels have continued to strengthen accordingly, and provision coverage increased to 1.39% of GLAs, with collective provisions increasing from 1% to 1.05% of GLAs. Specific provisions have also continued to increase as the loan book seasoned. Write-offs totaled AUD 30.9 million for the year, and that represents 13 customers. We retained our vulnerable industry economic overlay for FY 2024, noting this has reduced as our new credit risk engine more dynamically incorporates economic assumptions into our underlying collective provision assessment. Let's turn now to the ninety-plus days past due and impaired ratio. Ninety-plus days past due and impaired was 2.31% of GLAs at June. Now, this ratio has increased from 1.09% twelve months ago, but pleasingly, after increasing for several quarters, we have seen this metric flatten from the level reported in March. Importantly, this ratio remains below 3.3%, which, after factoring in cures and recoveries, is the level which equates to our at scale through the cycle, 50 basis points cost of risk assumption. Now, as shown in the bottom chart, the key driver of the reduction was a pickup in customers reaching a resolution. So that includes cures, recoveries, and write-offs. As we've said in the past, SME customers are complex, and in times of stress, we take time to work with them constructively to achieve an optimal outcome. While resolution rates can be lumpy, we do expect to see a more balanced ratio of resolutions versus additions as the portfolio matures. Lastly, to capital. We continue to maintain strong capital ratios, both at CET1 and total capital levels. We ended the second half with a CET1 ratio of 14.7%. Growth was the biggest driver of capital consumption at 150 basis points. There was a 30 basis points drag from risk weights on lending, which can be volatile depending on security and lending mix. Organic capital generation from earnings contributed only 30 basis points this half. Now, this was low, but reflected trough NIM from the TFF, the one-off costs we absorbed, and elevated CapEx from our tech re-platforming program. We anticipate capital generation to improve in future halves post these headwinds. Other items delivered a net 20 basis points benefit, largely driven by reduced liquidity. We have a number of proven initiatives available to support capital levels and our growth agenda, including AT1 issuance and capital relief term securitization. Thank you once again, and I'll now hand back to Chris. Thank you, Andrew. Look, in terms of looking forward, I wanted to start by saying what a great team we have here right across all of Judo. We've a great culture, we've got a great employment brand. It really is our secret sauce, and probably the thing I'm most proud of in the build of Judo. We attract A players in all parts of our business, and while, you know, we're often referred to as a neobank, we're certainly not new to banking. I mean, this is my forty-first year in banking, and we have a bench of executives who are very, very experienced bankers. Andrew, Frank, Jess, and Yen, they should all be well known to you, and we're delighted to have recently been joined by Ros Fornarino, who was previously the Chief Operating Officer of ME Bank and had a long executive career at NAB and ANZ. Next month, Renee Roberts joins us as our new Chief Risk Officer from APRA, where as Executive Director of Banking, she was responsible for the supervision of all banks across Australia. Prior to that, she had an extensive banking career as the Group Executive of one of the Group Executives of NAB, and so she'll also be well known to many of you. Our employee value proposition has never been stronger, linked to our focus on culture, and we believe we are the pre-eminent destination for business bankers in Australia. Next, on to the environment. The economy has, of course, been resilient for the past two years. What we're seeing from our customers is a focus on passing on higher input costs, maintaining margins and strong balance sheets. There's a definite shift in the economy from being consumer-led to business-led as the household leveraging story is over, and the top chart here shows how business investment has continued post-COVID, particularly as SMEs look to offset increasing costs with investment in labor-saving productivity, doubling down on their CVPs and managing de-globalized supply chains. The outlook of course is still uncertain, and there's no doubt higher rates are still working their way through the economy, but I would stress that we are not a macro play. We are 2% of the market. Our business model is to back the best entrepreneurs, sponsors, owners, back the winners who know how to pivot during different stages of the economic cycle. It's why we stayed open, supporting SMEs during COVID. And we believe that our model works best in periods of volatility, when backward-looking models are of limited use, and forward judgment is needed to assess credit properly. Before turning to guidance, I wanted to discuss operating leverage, which I touched on briefly in my opening slides. Our target of 15% profit growth for FY 2025 could be interpreted as modest for a growth business. But when adjusting for the impact Term Funding Facility, you can see here the true operating leverage we will deliver in FY 2025 is significant. In fact, in the order of 60%. Term Funding Facility has been a helpful tailwind to our profitability and capital, but at the same time, it's distorted our profit and loss. And now that we've successfully Term Funding Facility, the true operating leverage will become clear. The steps we've taken to manage our cost base and our investments in technology will mean that revenue growth, simply from growing the loan book, will now translate directly into profit growth. And our cost growth will remain above inflation as we continue to invest. However, we've reached a point of maturity where costs will largely be revenue-linked, as the upfront investment needed to build a bank is nearly complete. And with our scalable tech platforms now in place, we're on the verge of delivering significant jaws and growth in ROE, and the trajectory of our profitability in FY 2025 will continue into FY 2026. Our FY 2025 guidance is provided on this slide. We are reiterating our target for 15% growth in profit before tax. Underpinning this guidance, we expect lending growth to remain above system, with GLAs to be between $12.7 billion to $13 billion in June next year. This range is, of course, consistent with our original FY 2025 guidance issued six months ago and has been narrowed, reflecting our goal of prioritizing economics as well as growth. We continue to expect NIM in FY 2025 to be in the range of 2.8%-2.9%, gradually improving throughout the year due to the high conviction drivers that Andrew set out, and our June 2025 exit NIM will be 3%. We will continue to be disciplined in terms of cost and expect our CTI to be broadly stable in percentage terms, and we expect cost of risk to be stable in dollar terms. FY twenty-five ROE is likely to improve slightly, but will be a story of two halves, as operating leverage clearly emerges in the second half of the year and sets the trajectory for FY twenty-six and beyond. And lastly, I want to provide my own personal commitment to achieving metrics at scale, hence including them, again on this slide. In closing, with the build done, we have a clear strategy to now scale a world-class SME business bank that delivers ROE in the low to mid-teens. We've navigated a significant amount of complexity to turn our vision of eight years ago into a reality, and we've now reached a threshold point in our journey. With our core lending franchise performing well and our now significant balance sheet, we have increasing optionality for growth. We're expanding our presence into new regions, and we're looking at adjacent products and segments to augment our growth, and we have an advantage as a cloud-native bank with a simple product set. Our transition to strategic, scalable platforms is nearly complete, which underpins our ability to deliver significant operating leverage. As well as our lending proposition, we've also built an incredible deposit franchise that can fund the majority of our growth, and we have an exceptional team who are highly execution-focused. So in short, I mean, this is my eighth year of Judo since the start of our journey, and I really have never been more excited about the outlook for our bank. So with that, thank you for listening, and myself and Andrew will now look forward to taking any questions. Thank you. To ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment as we move on to our first question. And our first question is gonna come from the line of Matthew Wilson with Jefferies. Your line is open. Please go ahead. Yeah, good morning, team. Matthew Wilson, Jefferies. Hopefully, you can hear me okay. We can, Matt. Thank you. Yep. I'm at the CBA result last week. They bemoaned the negative spread on TDs. You've seen subsequent pricing moves by the majors. If we move back to a world of a positive TD spread, which was in place pre the GFC, how would that improve your NIM, given that you continue to include sort of an eighty basis points negative spread in your NIM assumptions going forward, or does it get competed away? No. I mean, Matt, I mean, the math is relatively simple, as you said. I mean, our margin is 80 basis points over swap. You know, nearly AUD 10 billion of deposits now, so that would be AUD 80 million that would flow directly to the bottom line. I mean, we do think, you know, you'll also see that CBA last week. I mean, our premier TD rate is the one-year rate, and you will have seen some downward movement on that last week. I think CBA dropped 40 basis points. You know, that's not a direct comparison with where we compete. As you know, we compete in the branchless bank space, but we always said that we believe that Term Funding Facility was repaid... We believe that the competition for TDs would moderate, and that would manifest itself- Yeah in lower margins. But yes, I mean, if we got to, I think, like in the U.K., I was there four weeks ago, and yes, I mean, they can't understand that we pay over swap for our TDs, and as you say, the impact on NIM would be significant. I don't know, Andrew, what would it be? It would be a NIM of over 4%, presumably? Very significant, but you know, I think, you know, we, we've put our guidance out there, Matt. That's where we think, and that's where we're managing to. Yep. And, look, I think the only add to that comments from Chris is that, you know, we have started to see a little bit more rationality in the deposit pricing market, and that needs to wash through. Swap, the volatility in swap rates is probably the other component there, and that has been a little bit unhelpful of late, but, you know, some stability there and also just more rational pricing, I think is what will bring that front book deposit margin, which we have been at the top end of that eighty to ninety range. We have been at ninety basis points that we expect will kind of come down through the year to the bottom end of that range. Excellent. And if I could just ask one more question. You know, in your outlook comments, you talk to an economy that is transitioning from consumer-led to business-led. You know, that's very positive from a structural perspective in this country. For too long, we've lived on the back of a non-productive home loan. You know, what gives you confidence that that transition is actually taking place? And what parts of the economy do you think will be big participants, and how are you front and center those sectors? Yeah, no, thank you. Thank you, Matt. I mean, as you said, I mean, the household leveraging story, you know, is definitely over. And we're seeing system credit growth at, you know, 7-8%, even higher in some areas. We think that's a reflection of the fact that the good businesses are just getting on with life. You know, I don't think interest rates are going anywhere soon in terms of downward trajectory, and also the pressures around labor and increased costs. And so what we're seeing is businesses that are doubling down on investing in productivity and labor-saving technology. They're investing in their CVP, their customer value proposition, they're investing in energy transition, they're investing in the de-globalization of supply chains. We're seeing it as quite a broad spread across our customer base. As you know, I would keep reminding everyone, we're 2% of the system. Our business model is to back the best businesses, the best entrepreneurs, the best sponsors, and they are the ones that are actually pivoting, and actually starting to invest now, and you're seeing that through our lending growth. Thank you. Thank you, and one moment as we move on to our next question. And our next question is gonna come from the line of Jonathan Mott with Barrenjoey. Your line is open. Please go ahead. Thank you. Just a question on slide 19, if I could, which is the capital side. If we look through the CET1, obviously come down a lot in half, a bit more than we're probably anticipating. If we roll forward with the credit growth over the next year, two years, you're probably gonna get a bit tight on capital as you approach the $20 billion scale economics. Now, the majors are running the CET1 ratio at around 12, maybe a bit around that number. That's where the market's kind of comfortable with it. How low do you think you can take that CET1 ratio while maintaining investor confidence? And second part, just around... you talk about, I'll ignore AT1 because it's not equity, but term securitization and other risk-weighted asset management tools, what are you thinking you could do to try and generate some additional capital? I mean, I'll take the first part, and I'll hand over to Andrew for the second part, John. I mean, John, obviously, we've been having this conversation for many years now. I mean, I remember pre the IPO, talking about this topic and in terms of our original projections for the thesis of Judo and those target metrics at scale, and they haven't changed. I mean, I've consistently said that our thesis was to have a CET1 ratio that was somewhere between the regional banks and the major banks. So as you said, the major banks are at about 12, and the regionals are sort of high tens, 11. That's reflecting the fact that the regional banks are largely home loan banks, and of course, the major banks get the benefit of advanced accreditation. But also, we don't want to run our capital levels too skinny because, you know, we're still gonna be a high-growth business beyond a $20 billion book. And that still remains our thesis, that underpins those metrics at scale. And I guess on the second part of the question, John, in terms of other kind of capital options, I mean, as we've said before, we do have a number of options available. So the AT1, the capital relief term securitization, that are trades that we did for the first time last year. As some of you will have noted, we paid a bit of a first-issue premium there, but you know, we've proven our access to those capital options, and so they are options that we genuinely have available to us. And we'll continue to look at these to make the capital stack more efficient as we do get closer to that endpoint, as Chris articulated. RWA management is, I guess, a bit of a general term, but there are things that we can do there, I guess, with the scale now of the book and how actively we think about that, how we manage the risk-weighted asset piece, that we just have some options that we probably didn't a couple of years ago. So, you know, the point here is we've got a plan, we're managing to that, and we do have options available to us that we will look at to make the stack a bit more efficient going forward. I mean, John, also one thing just to reiterate is I talked in my presentation about some of the options that are in front of us. One of them is warehouse funding to the NBFI or private credit funds that support SMEs, and I would underline to support SMEs. The risk-weighted assets on warehouse facilities are considerably lower than the risk-weighted assets on our core business. And so we are also factoring in some assumptions around some of that growth being in that particular segment. Thanks, Matt. Can I ask a second question on slide 12, where you show the front book lending margin? I think Matt just asked about the deposit side, and on the lending side also, there's a lot of moving parts. But you've seen quite a lot of volatility on the front book margin. You can see 4.6% down to 4.3% in the June quarter, then the exit margin at 4.5%. You mentioned there's a bit of a mix in that. Can you give a bit more color on the driving factors around that, that's leading that front book spread to move around so much? Yeah, absolutely, John. As you said, it is largely mix. So you know, our core business loans are roughly around about 4.8%. Asset finance can be as high as 5% sometimes. It's pulled down by our home loans, so home loans can be in the sort of the mid-threes. In that particular case, you're absolutely right. In May, actually, what was pulling that average down to 4.3% was a higher concentration in home loans strangely in May. They were 15% of that month's originations, whereas it's generally about 10%. And I would stress, we don't do home loans as a standalone product. We only do them as part of a cross-collateralized package with an SME. But I think what was particularly pleasing for me is that in June 2024, we had the highest amount of originations ever for Judo, well over AUD 500 million of originations, and they were done at 4.5%. And that particular month had the normal mix, if you would like, in terms of products. And the pipeline, as Andrew said, is now at 4.6%. We are definitely seeing competition using price as a strategy easing. And so, you know, we really are back to the average front book margins now pre-Term Funding Facility. Great. Thank you. Thank you. One moment as we move on to our next question. Our next question is going to come from the line of Richard Wiles with Morgan Stanley. Your line is open. Please go ahead. Good morning. So thinking about your metrics scale, it looks like you're on track to hit the loan target, the bottom end of the loan target in twenty twenty-seven. You've done a good job of managing margins recently, and you've expressed confidence to get the margin above 3% at the start of twenty twenty-six. But I'm sort of interested in the cost-to-income and the ROE targets, particularly the ROE. Chris, you continue to express confidence in your low to mid-teens ROE target. Can you give us an idea of when you expect to reach that target? Is it two or three years away? Is it five years away? Is that a longer duration target? How should we be thinking about that? Thanks, Richard. I'm upstart on that one. So you're right. Look, I think we are getting closer to the metrics at scale. We'll probably hit the low end of the GLA target, probably at the end of FY 2026, based on the kind of the, you know, the forecast that we've got for 2025. So we're starting to kind of get in the ballpark in that year. The NIM, as you noted, the exit NIM, we've provided guidance that we will reach that at the end of FY 2025. So there's... We're starting to kind of hit some of those numbers in FY 2026. CTI is probably the one that we will achieve last, I think, as we just kind of continue to scale the business and continue to build the income part of the CTI, the CTI ratio. So costs are going to continue to grow. I think you've seen that cost growth level out as we said we would manage towards, and there's a little bit more of that to go and a little bit more leveling out of the dollar cost growth to go. And then really, it's a story of what happens with the income, which as we continue to build into that GLA range, we will continue to get that operating leverage. The CTI one is probably one that comes last in terms of the sequencing of when we will get to those metrics at scale. You know, you've asked us before how that ROE trajectory will come about and when we'll kind of get to that, get to the you know, the double-digit crossover threshold. That, in winding through these metrics, is probably a little bit away, but it's in much closer touching distance than we were a year or so ago. And we're very confident of getting there with, I think that underlying operating leverage that you can see in the business and that we tried to draw out on Chris's latter slides in terms of the underlying profitability of the business. That is very much there, and that will be part of this sequencing with that CTI metric kind of coming last as we build the income on top of the cost base. Okay. Thank you. Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Andrew Triggs with JP Morgan. Your line is open. Please go ahead. ... Thank you, and good morning. Our first question, just around digging into the NIM walk from the 2.63% in 2024 NIM to get you back towards 2.75%-2.84%, first half of 2025. Just interested in the component of liquidity that will boost that. So perhaps to ask for the June, for the June spot balances, what was trading in securities as a percentage of the loan book? Noting that it was about 34% across the average of the half, but that obviously will go to 20% over time. So just interested, on a spot basis, what did that look like in June? Yeah, so we've. You're right. We've brought it down. I mean, on an average balance sheet basis, it was in the thirties for the second half. And we still have been and had carried a bit of extra liquidity with most of that TFF kind of back-ended in terms of the payment. So there's a bit of that that we still need to wind down in first half 2025. But we've the level that we're kind of managing towards Andrew is much kinda less volatile, I think, than what you've seen in the past. So 34% is where we were for the second half, and you know, 20% is what we expect that average to be in the first half 2025. There's probably a little bit more tightening that we can do on that in the second half, and that we will achieve to manage to, as we kind of work through kind of the roll-off of that book. So that liquidity that you can probably see on the NIM drivers on slide 14, there's an element of that, of the absolute dollar impact that's reducing. The other piece, though, there that is a bit of a contributor, if you're working through the numbers, is just a slight improvement too, on the yields that we're getting from that liquidity book, because you know, some of that's rolling off from fixed rate as well. So we've called that out in previous results. It is a bit of a secondary impact as well as the volume impact. Thank you. And second question, just, how do you expect the sort of additions to the NPL bucket to trend over the main remainder of the year? So we've seen about a 20% decline in the additions to NPLs quarter on quarter, but how do you see things, and do you expect a lag to an improvement post the start of the RBA cutting cycle? Yeah, look, I mean, we've... The metric that we obviously use here is ninety days past due and impaired, and that has flattened, and it's flattened because we've had a much more balanced level of the additions to resolutions. We've called that out and provided a bit of disclosure on slide 18 on this. We've been dealing with this indigestion, where we had more things tipping in than were coming out. And we've started to see that ninety-day impaired metric flatten, 2.63% in March. It's come down to 2.31% in June, and it's been flat in July as well. So it's a much different profile. I think when you look at the 30- to 89-day as well, that has come back. And so we've got kind of less coming through that as a what I call an early indicator as well. So I think going forward, we expect this to be more balanced, and that is also reflected in ultimately the cost of risk, the P&L cost of risk guidance that we've put for FY 2025 as being broadly stable from a dollar perspective. And that obviously means that with a larger book, that will be a little bit lower from a basis point of GLA ratio. So we're starting to see some helpful early or lead indicator signs that we might be seeing this asset quality kind of flatten in terms of outlook. Okay, thank you. Thank you, and one moment for our next question. Our next question is gonna come from the line of Andrew Lyons with Goldman Sachs. Your line is open. Please go ahead. Thanks and good morning. Chris, maybe a first question for you. You now have 144 bankers and expect, I think, to add another 20 in FY 2025. From memory, at the time of your IPO, your metrics at scale was premised on about 200 bankers. Now, despite this growth and the differentiation, you believe that your bankers bring the business. You're still originating about 75% of your loans through brokers, which is well ahead of the broader system and your target of 50% at scale. Can you perhaps just talk to how the penetration of broker lending in business banking has played out in the market and for Judo, particularly versus your own expectation? Yeah, no, it's a great question, Andy. I mean, we are definitely seeing a structural shift, I think, in terms of the dominance of brokers in SME lending now. I mean, we think they probably represent 35-40% now of all flow. You know, I think originally, if you go back to the original thesis of Judo, we hoped to sculpt that 75% number that you talk about down to sort of 50-50. I'm not sure that's achievable anymore. I think I'd be very comfortable at 60-40. I would add that from an economics perspective, we're relatively agnostic to that number because we get a huge productivity benefit from broker-introduced loans. As we, you know, there's 19,000 brokers in this country. We only deal with about 1,300 of those, and they are sort of dedicated SME brokers that we spend a lot of time with. We spend a lot of time at their PD days. They know us well, they know our risk appetite well, and so because of that, we get a very, very high conversion rate. So we get about an 80% conversion rate, whereas obviously, if we're originating direct with a billboard on the side of a tram, we would be getting, you know, much, much lower conversion rates, which is obviously what the big banks get. The push into regional and agri in particular, I think will help us there. Relationship banking, you know, is even, you know, is even more about the actual individual banker, their background, their experience, their networks, and we do find that as we go, as we expand into the regions, we get a higher direct just through the strength of those relationships and also in Agri lending as well. So this is a big drive for us, as you know. You know, we're gonna open another 10 regional locations this year, and I'm hoping that that will have some impact on that 75%. But it is a structural shift. I mean, the brokers are just growing and growing. It has flattened a little bit in the last 12 months. It might, maybe it's reaching a point of saturation, I don't know. But it is something that we're very focused on. ... Thanks, Chris. That's helpful. And what gives you confidence that increased penetration versus plan of brokers isn't gonna result in, you know, pressures on profitability like we've seen over the last sort of 20 or 30 years in mortgages? Look, it's a great question. I think, I mean, that's an interesting question for big banks that have got huge direct distribution, and networks. But for us, we built Judo as the best friend of commercial brokers. So, you know, in architecting Judo, this was a big, big part of our business model. As I said, we have very, very high conversion rates. So if you were to drop 80% conversion rates down to 20%, which is probably what you'd get with direct and a bigger marketing spend, then that for us equally substitutes, you know, the 60 basis points up front that we pay and the 30 basis point trail. They also, you know, help us with the ongoing relationship management of the customer as well. They stay very close to the customers, which we leverage as well. So I, I've always been relatively, you know, agnostic. For me, the direct really is just a natural outcome of business bankers doing their job well and getting referrals from existing customers, being part of the community networking. It was never about marketing, it was never about billboards, it was just about being in the network. And as I said, in regional locations, the power of that is far more pronounced. Great. Thanks, Chris. And maybe Andrew, just a second question for you. I just note towards the back of the pack, you've introduced an ITOC, which appears to be hedged at the three-year duration. Can you perhaps just provide a bit more detail around the strategy and just confirm that you've applied that to the entire capital base? Yeah. So you're right, Andy, we have implemented an ITOC, an Investment Term of Capital replicating portfolio. It is on a three-year monthly rolling structure, so quite consistent with how the rest of the sector does it. And we've hedged, you know, in terms of the level that we've hedged, a level that kind of makes sense for what—for where we're at. Not dissimilar probably to where, again, some of the banking sector is hedged. We maintain a little bit of flexibility around that. As you'll recall, we hadn't hedged capital when rates were flat at close to, you know, ten basis points, and we basically put that on as rates have come up. So that will be a little bit of a drag over the next little while, if, you know, if we see kind of rates head the way that I think the forward curves are predicting. But, you know, we've had the benefit of that being unhedged, I guess, as we've kind of come up the rate cycle. But the structure, it's very consistent with the sector. It's a monthly three-year, and we've kind of hedged that again, as you'll see on the left-hand side of that page 32, such that we have a very minimal kind of interest rate risk through the overall book, which is ultimately what we're triangulating against. Great. Thank you. Thank you, and one moment for our next question. And our next question is gonna come from the line of Victor German with Macquarie. Your line is open. Please go ahead. Thank you very much. I was first just hoping to follow up on the NIM question. Obviously, quite a lot of volatility, particularly in the month of June, I'm assuming, with all the repayments happening. Maybe to start off, the two sixty-three, is that effectively a June margin, or is it essentially an exit margin? Or is it possible that exit margin was a bit higher than that once you remove all the volatility? Yeah. No, look, that was a June margin, Victor, and, you know, it—as we've called out, it's trough NIM for us because, you know, that month was the month that we still had the last piece of the TFF, when we paid that off during that month. So that's, if you like, I guess, our monthly kind of starting point, the trough NIM. The, you know, the walk from there, the key components that we've called out on slide 14, we obviously have a drag still from the TFF. This is an averaging, where we still had benefit from TFF in that second half NIM, so there's an averaging out of that for first half 2025. I think as you think about the blocks in the first half 'twenty-five, most of that, that residual TFF drag is gonna be offset by what we're doing with the, with the treasury and the liquids book. So call it about three-quarters of that. And so really, where, where you're at from a, you know, from a NIM, once you've looked at those two big factors, is you're probably down in the order of about kind of five basis points off the, off the second half, which, which puts you kind of bang in the line, in the middle of our kind of guidance range. And then, as you can see from slide fourteen, there's some, there's some unders and overs with other, with other factors that, that, that drive that NIM. But look, we are very confident in, you know, our NIM guidance. We've given you very, you know, specific guidance now on the first half and the second half, and we're kind of really managing through this wash through of the TFF and the continued build that we will get from the lending margin front book wash through, and just that funding stack rebalancing that we've been progressing over the last six months. Okay. No, that's helpful. I think you know, Andrew kind of alluded to that. You probably will be running down liquidity. If you can maybe give us any sort of color on what impact that would have on average interest earning assets, because you've given us guidance on GLAs. Yep. I mean, would it be fair to assume that average interest earning assets will grow less than GLAs as a result of this liquidity rundown? Maybe any sort of color on that will be helpful. Yeah, look, the GLA, I guess what's probably helpful on the liquids, sorry, is liquids as a percent of GLAs. We talked, and Andrew asked a question on this earlier. We talked about that moving from, you know, low 30% down to 20% of GLAs over the second half 2024 into first half 2025. The liquids as a percent of GLAs, as at July, was about 25%, and at the end of July, that's gonna move down to 23%. So there's a little bit of a reduction between that June ending position and July ending position. And this is something where we will kind of continue to rightsize that in a world where we've fully repaid the TFF, and just appropriate for our scale. So I think there's that level of liquidity is moving around a bit, much less than it has over the last 12 months. But you will still see that as a% of GLAs, which is kind of how we talk about it, and it's a good way to think about it from a modeling perspective, reduce from, I guess, that kind of ending point for June again into July, and we'll get a little bit of that more eking out a bit more efficiency as we kind of go forward through the rest of the first half. Right. So basically, and it within that two to 63 margin, there was effectively 25% of liquids, which will reduce to 23% over the course of the half? Yeah, as- Or even- ... as a% of GLAs. So there's still, we still carried a little bit of that book- Okay ... 'cause most of that TFF was repaid towards the end of that period. So we've just been managing that level of liquidity we hold on top of that. And a bit of that, we were still carrying elevated at the full year. But we'll continue. The stance on this is we will continue to optimize that level of liquidity, which has been a factor dragging our NIM, as you all know. There's a price to pay, I guess, for access to the TFF, but we will be managing that more efficiently from a volume perspective going forward. And then there's also a little bit of it, that secondary benefit, which is around just the yield that we're getting on that portfolio. We all expect a little bit of an improvement, too, through 2025. Got it. Thank you. And then just maybe on lending margins, I mean, you know, kind of already been discussed on the call that it looks like deposit spreads are coming in. There was an article, I think, in the AFR, timely, talking about this today, which presumably should be a tailwind for your funding costs. Usually, banks tend to, you know, compete on one side of the balance sheet, and if the competition is lessening on the deposit side, they tend to compete a bit more aggressively on the lending side. How do you think those trends, the positive trends on the funding side will transpire to lending margins? I'll take that, Victor. I think what we're seeing is what we sort of predicted that we would see a couple of years ago. It's really the impact Term Funding Facility now that that's being repaid. We're not seeing, you know, the price lever being used as a sort of a competitive strategy, as it were. And so, yeah, I mean, you'll know from, you know, the history of Judo that our... This time last year, our gross margins were down at sort of the low fours. But at that point, we had extraordinarily cheap funding Term Funding Facility, and i think that's true of our competitors as well. I think we're just seeing a normalization now back to SME margins that were sort of pre-COVID. You know, as I said, as Andrew said, the pipeline, which is a huge pipeline, AUD 1.8 billion, that's at 4.6%. You know, we're comfortable with the guidance we're giving on that. Great, thank you. Thank you, and one moment for our next question. And our next question is gonna come from the line of Nathan Lead with Morgans. Your line is open. Please go ahead. Yeah, good day, Chris and Andrew. Thank you for your presentations. Just three quick ones from me, if you don't mind. So first up, Chris, I've heard you describe your sort of target NIM as being a sort of comes together as four hundred and fifty basis points from your lending margin, a blended cost of funding of about a hundred and thirty basis points, liquids drag. So that brings us to three hundred and twenty. Yeah. Obviously, you're exiting FY twenty-five at three hundred. Do you still think three twenty is reasonable? And if so, what sort of drives the or closes the gap between those two numbers? I mean, the two other things that are obviously a component of NIM when you're modeling it will be brokerage and establishment fees. They generally offset each other. So just for the sake of completeness, when I'm sort of giving a macro, the easy maths to our NIM. But on the 3.2, I mean, it's yeah, the difference between a 4.5% margin and a 4.6% margin, the difference between an 80 basis point assumption for deposits and a 75 basis point, the return we're getting on our liquids. Our liquids, as Andrew said, is 23% in July. I mean, that is on a continued downward trajectory. That is not the end thesis. So when we talk about metrics at scale, you know, we're obviously continuing to sculpt down the amount of liquidity that we're holding as we continue to mature as a bank, and hopefully also switch from an MLH bank to an LCR bank as well. But other- I mean, probably to add to that, Nathan. I mean, the other, while you're right, we've called out that that exit NIM of 3% at the end of FY 2025. I think as you think about those big high conviction drivers that we had on our NIM forecast slide, a lot of that is still to, you know, it won't all have washed through, for example, what we're seeing on the front book in terms of lending. That won't have all washed through into the NIM in full by the end of FY 2025. So there's gonna be a bit of a tailwind still beyond that point, which obviously supports our above, you know, 3% at scale NIM guidance. The wash through of what's happening on the lending book, deposits in terms of the overall funding stack, we think we'll get to, you know, another good leg up in terms of the contribution of that. You know, it moved from 50% to 64% over the last twelve months. That's gonna move up again at the end of, you know, by the end of June 2025. There's probably a little bit more that we will do in terms of increasing that to the at scale, at 75% of the funding stack. And as Chris said, just continued kind of tighter management of liquidity, tightening the screws a little bit on wholesale funding. All of the factors that you see on slide 14, they're not all done and washed through by the end of June 2025, which is why we call that an exit NIM. And you'll get a little bit more of that benefit, but we will, I think, provide that solid, sustainable NIM base that you'll see, that's the at scale of above 3%. Great. The second question is just about the gross loan growth. Obviously, you're guiding for $2-$2.3 billion. Is that kind of where you see kind of steady state going forward now? Or do you sort of see yourself accelerating back into that sort of mid- to higher $2 billion dollar type run rate over time? Look, I think it's a great question. I think, you know, obviously, we've referred back to John's earlier question around capital. You know, we've sculpted our capital carefully as well. So, you know, if the market gave us the opportunity to do another $1 billion this year, we wouldn't take it because of the, you know, the way that we're managing capital. I think the entry into our warehouse business, I think, you know, that could see that lending book accelerate quite significantly because it is very low RWAs as well. So we could do that and manage capital at the same time. Yeah, I mean, I think growth between sort of 2 and 3 billion is probably our sweet spot at the moment. And then, you know, we continue to invest in about 20 bankers per annum, which feels about right for us. We don't want to go more aggressive than that because we'll start compromising on the quality of those A players, and the bedding down from a cultural perspective. So I think, yes, I think sort of 2 next year and, somewhere between 2 and 3, you know, in FY 2026, FY 2027 would be a fair assumption. Yeah, okay. Then finally, I mean, I suppose a bit of a detail one, but for Andrew, just the liquidity book. Just, can you give us a bit of an update on the maturity, timing, and, and I suppose the duration of what you're actually investing in on that book? You had a handy slide, I think, a year or so ago on that, but it's dropped out. Just, wondering if you can just give us an update. Yeah, I mean, maybe just a little bit of color on it, Nathan. I mean, a lot of the story of our liquidity book has been around the TFF. We've talked about that a little bit already, and so we'd kind of lay it out really against, you know, ultimately against that TFF repayment profile. And that kind of included, I guess, some specificity around how we thought about tenor of that book and also, you know, the fixed versus floating of that book. We did have some- Mm-hmm ... probably some more fixed as a% of that liquids book, you know, at the beginning of that TFF journey. So I think in terms of kind of color going forward, I mean, it will be we will kind of manage this in a much more kind of BAU sense going forward. There will be a little bit of transition, I think, from what was fixed into, you know, into floating, in terms of that mix of the liquids book. And in terms of duration, you know, we, you know, we're looking to. We're not looking to do anything, probably as complex as we had before around the TFF. So the guidance that we give on that and the way that I think to think about it from a modeling perspective is, as we've called out, we're in the low 30% of GLAs last half, we're moving to 20%. The spot numbers around, you know, June being 25%, moving to 23%. But that's gonna kind of continue to be managed down. And I think in terms of the yield on those assets, which is probably really the other input for modeling, you know, that we expect to kind of trend back towards one month BBSW. That had been a little bit suppressed because of some of the fixed nature of what we had in that book. But that will trend, you know, closer towards BBSW as we move through, you know, FY twenty-five. That's great. Thank you. Thanks, Nathan. Thank you. One moment for our next question. And our next question is gonna come from the line of Brendan Sproules with Citi. Your line is open. Please go ahead. Good morning. Thanks for taking my questions. I just have a question around your outlook, particularly around asset quality, and I'll just refer you to slide 17. You had 72 basis points of the loan book average GLA this year from impairment. But it looks to me, if you keep that dollar amount the same, that basis point drops to sort of in the mid- to high 50s. I was wondering, how do we sort of close the circle on that, given that you've obviously got much stronger lending growth this year, but also you continue to expect the portfolio to season? So I imagine the specific provision, which was a major contributor in growth last year, will continue to rise. Yeah, I mean, there's some different ways to come up with, I guess, the top-down modeling, which I'll run through. But your - yeah, I mean, your math is correct. If holding the dollar cost of risk, you know, broadly stable, which is our guidance, means that that, as basis points of GLAs, is gonna come down. Now, we have obviously been building that, the provision on the balance sheet as we've been growing, and that's been a key factor of the GLA, the cost of risk impact on the P&L. But yeah, I mean, in terms of how we some simple kind of benchmarking, I think, to think about what's appropriate for FY 2025 is that, you know, as we've said, you know, 50 basis points is our kind of, you know, through the cycle assumption. So if you think about what the net additions will be to the GLAs during the year, that range of 2 to 2.3 at 50 basis points, you know, call it about ten bucks in terms of composition from new additions for the P&L cost of risk. And then probably the second component there is what happens with specifics, and that being in the order of kind of fifty basis points of, call it, the whole of GLAs, which kind of gives you the, you know, the bulk of that, the bulk of that kind of difference. So it is gonna go down, based on our modeling for as a ratio to GLAs, but we're kind of confident with that number, noting that, you know, I think the earlier comments that we've made around what's happening with the forward-looking metrics, which is obviously the ninety-day and impaired, where we've seen that flatten. Thank you. That's helpful. And just a second question on some of your deposit spreads. I know the benchmark yield curve's been moving around quite a bit of late. Yes. But when we get into a rate cut environment, which I think most economists have maybe early in twenty twenty-five calendar year, does history show that the spread actually widens on TDs in a rate cut environment, given that the deposit rates tend to lag as they did on the way up, on the way down? And is that a risk, I guess, to your second half margin guidance that you've provided here today? Yeah, look, volatility in the swap is, you know, has been unhelpful for us, and it's been an unhelpful start to the year because we obviously saw what happened to that volatility with all the speculation around movement in rates a good couple of weeks ago. And that did see the absolute cost that we pay come out a little bit. So the volatility in the swap rate is a risk. Your comments around what happens in a falling rate environment, I think are relevant in that. The other comment that's interesting in terms of behavior with the TD customer in a falling rate environment is that we do see more interest in the shorter tenor, because, you know, depending on kind of where you are, you know, with the rate cycle, you know, those rates can potentially have a higher headline rate than some of the longer dated TDs. Volatility is unhelpful, clearly for what we pay, but there's also, in a falling rate environment, a you know behavioral element, too. I think stepping back from that, though, Brendan, the kind of the economic piece here is that in a rising rate environment, when you have at-call deposits, that's a tailwind to your-- ultimately, to your overall deposit cost and your funding cost, and other banks benefited from that in the last couple of years. We do not have at call, and so that has not been a necessarily a tailwind for us. But in a falling rate environment, that clearly becomes a headwind for the sector. Now, that is not a headwind that we will have because we don't have at call, we just have TDs. I think it's gonna be interesting to see how the overall sector manages that potential headwind and what that means for deposit pricing, which will ultimately kind of impact, I think, the competitive environment on TDs. It was noted earlier in the call that there has been some movement by the other banks already ahead of falling rates. It's gonna be one to watch. We are not kind of being overly aggressive with assumptions here. We're sticking to that 80-90 basis point range with volatility in the swap curve kind of being one that is, you know, that does create some volatility month-to-month pricing. Perfect. Thank you. Thank you, and one moment as we move on to our next question. And our next question is gonna come from the line of Azib Khan with E&P. Your line is open. Please go ahead. ... Thank you very much. Chris, you've had a couple of questions on capital. I just want to piece it together and make sure I'm understanding this okay. So it sounds like, Chris, on one hand, you're saying there's enough common equity to take you to an at-scale loan book. But then on the other hand, in response to Nathan Lead's question, it sounded like you said you don't want to ramp up your loan growth too much because you're, you need to manage your capital position. But if you can get to your at-scale loan book earlier, why isn't that something you would do? Because, Azib, we've made assumptions around, our regulatory settings. So as you can imagine, when we got our ADI license, we didn't start with a, you know, with a capital ratio from APRA that was aligned to the, to the major banks, that 11.5% that I'm talking about. So, you know, we started with a higher level of capital, as you'd expect. We've had our banking license for five years now, and I can't talk about, you know, what our potential, regulatory settings are on capital. But obviously, we, we've, I mean, we've always sculpted, to a downward trajectory, but getting that sculpting right is essentially the answer to your question. I think that adds to that, Azib, is that, you know, it's what's happening with the organic capital generation in the bank as well, and- Yeah. We called out that for this result, we did see that low, and it was low for various factors. It was low because of the actual profit that we generated, and the second half was low because of trough NIM, the factors we've talked about, also some of the investments we've been doing in terms of CapEx, and also, you know, the impact, I guess, of the provision build on the capital drag as well. These are things that are gonna be increasingly behind us as we move forward, and that's before you start to overlay the very significant operating leverage in the business that Chris called out in his earlier slide. The other factor that I think you need to think about with the capital bridge is just the increasing role of organic capital generation as, you know, half on half as we go forward. And that will be an increasing offset to what has been, you know, capital consumption just from growth. There is a couple of other factors at play that I think are also important to note, but that organic capital generation is one we will be speaking more and more about over the next couple of halves as, you know, we start to really see the economics of the underlying business come through. Thank you for that. Also, Chris, you've mentioned that, you know, you'll look at funding SME warehouses because it's quite capital efficient. Can you achieve a margin of four hundred and fifty basis points over swap on that sort of lending, or will that be lower margin? Look, I think, I mean, it'll be deal specific, Azib, but generally, I mean, we're happy to continue giving out guidance of 4.5%, with and factoring that into our growth assumptions. So yeah, I mean, again, it will be averages of averages. Some of them will be lower. What I will say is that there's generally a direct correlation with that type of lending between the margin and the risk-weighted assets, and so ROE. And so, I mean, some of these loans can be sort of 30% plus ROE. So if there is a little bit of trading off of margin to achieve that, then we would obviously take that. But at the moment, in terms of the balance of how we think we will be originating loans, particularly over the next 12-24 months, you know, we're comfortable with that average margin of 4.5%. Thank you for that. Just one more, if I may. You've obviously bolstered your provision coverage. It's now sitting at one hundred and thirty-nine basis points of the loan book. However, if I try to compare that, and I know it's hard to do an apple-for-apple comparison here, but if I take a look at some of the business lending provision coverages of a couple of the major banks, which excludes the institutional books, just the Australian business lending books, they're sitting at about one hundred and eighty to one hundred and ninety basis points. Is that sort of range you're headed into in due course, or do you believe there's a reason why your book commands a lower provision coverage? Yeah, look, it's a tricky one, Azib, getting the benchmarking here. I appreciate, because there's not a lot of really good disclosure for what is a like-for-like portfolio for us. It's one of the challenges we appreciate. Look, ultimately, we're comfortable with that provision level. You know, I think finding good comparisons is difficult, because there are always other things in those books, even at the more disaggregated disclosure for the other banks. You know, we've got some other elements that are in our book. You know, we've got a little bit of home loans in there, so, you know, how do you... Getting a true like for like is challenging. But the message on this is, look, we're continuing to build that provision balance, and you can see that with the disclosure that we've provided, and we've continued to build that provision balance as we've actually seen the forward-looking metric being ninety-day and impaired, you know, flatten over the last quarter. So look, we're comfortable with that. Appreciate the disclosure, like for like is difficult, but you know, we go through a very rigorous process here, and we're comfortable with how that provision is playing out in terms of the balance sheet level. Thank you. Thank you, and one moment for our next question. And our next question comes from the line of Brian Johnson with MST. Your line is open. Please go ahead. ... Thank you very much, and congratulations on the results pack. Very good disclosure. I had two questions, if I may. The first one is, your competitors, just in the last few weeks, seem to be talking about, Westpac sharply changing some of its pricing metrics. And I appreciate that, you know, you've got to do this at a point of time, but could you just run us through the pricing metrics that you're seeing on both the deposits and the lending side from competitors, even just over the last few weeks? I think, Brian, I'll certainly, on the lending side, as I said, there's no doubt about it, the big banks are falling back in love with SMEs, and they will always use the pricing lever as a way of getting short-term traction. What we're seeing is them playing the bookends, as I said in my presentation, so very competitive sort of on that above AUD 10 million, fully secured type lending, and also at the lower sort of below AUD 1 million, and certainly on Westpac, you know, we see it at the lower end. Our sweet spot is between, you know, $2 and $10 million, where it is very much relationship banking, and we've always said that price should not be a determinant as why a customer wants to bank with us, and, you know, we're able to get better economics as a result of that, but absolutely, I mean, we see pockets of it as well. One of the, I think one of the biggest challenges the banks have is consistency. Particularly, you know, it's interesting when I'm asked who our major competitors are, my first response is, which state are we talking about? Because it's different in different states. Mm. depending on the individuals that are there, and that's just one of the challenges of when you run these huge organizations and the amount of scale that you've got. On the deposit side, it's, you know, we compete with the branchless banks, and we understand that. We understand that despite everything I just said on the lending side, price, it is, it is a commoditized product, TDs. It is all about, it's generally all about price. For us, you know, our brand has matured tremendously over the last five years as an ADI. We don't have to be number one anymore, because we have an established customer base of maybe 50,000 customers. Our rollover rates are around 70%. And we can get very, very strong rollover rates now when we're number three, number four, in the price comparison sites. And that's largely because if whoever's number one is someone that the customer's never heard of, then do they really want to do the whole onboarding, KYC, AML checks all over again? And so as we get a more established brand and a bigger and bigger customer base and higher, and hold those 70% rollover rates, you know, we think we'll be able to generate even better returns from that, from that side of the balance sheet. Yeah, the only extra color to add on that, Brian, is, you know, we have still seen the majors be competitive in the intermediated deposit market, so that is still a bit of a flavor that comes through. It's a less transparent pricing market there, rather than versus the direct retail. So we've seen, we still have seen a little bit of competition there, but like as Chris said, on the retail, which is our, where we take the majority of our flow, you know, we're competing with those branchless banks, and competition there is, you know, has eased a tad. And, you know- Mortgage banks. Yeah, because of that dynamic around NIM and trying to manage the overall NIM. So yeah, we've seen a little bit more rational pricing, I think, across the board, in the retail space as well. The second question, if I may, just if we go to kind of think about all the slides, but if we zoom in on slide 31, your loan book is still heavily concentrated to property operators, which I see is all secured, which is great. But we can see that the 90 days past due gapping up quite sharply year on year, and I suspect it's probably down half on half, but it is certainly up quite a bit. But also, we've got this weird dynamic at the moment where a lot of asset values in the property market probably haven't been marked to market. Could you just run us through what you've done to ensure that the value of the underlying collateral? How much have you stressed those, commercial real estate, presumably sitting behind those property operators? Can you just run us through what you've done to check the veracity of the valuations, given that we know at a systemic level, a lot of this stuff hasn't been marked to market, the property values? Yeah, I mean, so first of all, I mean, just as a headline comment, I wanted to just stress, Brian, that we are still plagued by the law of large numbers. So, of that 232.31 over ninety days, 50% of that number, or actually 47% of that number, is actually just five customers. And so, you know, as you can imagine, depending on which segment, sector you then throw one of those five numbers into, it creates, you know, it does create some of those sort of outlier stats that you're referring to. I mean, part of our business model is really, as I said, it's old school relationship banking. We do, you know, an annual review, at the very least, on every customer. But for ones that we're more concerned about, you know, we would do quarterly reviews. We've got covenants in there. We would have LVR covenants. We would revalue assets as part of our credit origination process, as you'd expect. But also, we would expect our bankers, you know, they're in market, we would expect them to have their finger on the pulse. If there's something that's happened in terms of an asset revaluation, we would expect them to pick that up. But I'm not sure what else. Yeah, and I mean, in terms of the, you know, specifics, I guess, Brian, on the, on the, you know, Rental, Hiring and Real Estate, I mean, that as a portion, that's, that's not dissimilar to the overall portion of the SME market. So we have kinda structured the book with diversification at an industry level. That CRE bucket itself is obviously, you know, it's diversified across components. And typically, what we see for that customer is it's, you know, it's not just a straight property lend. We have a significant portion of that book where, you know, property value is not the only exit, you know, around 80-85%, where we will have some other element, for example, in, you know, income of the sponsor. Because SMEs typically use, you know, property as a wealth diversification, as much as they might use it for the underlying business. So there's some other dynamics there that are helpful for us, as we think about the underwriting and the risk, you know, across that part of the portfolio. I think that's, that's a really important point, Andrew. I mean, we don't do sort of dry, standalone commercial property lending, where the only income source is the, is the property. It's generally trading businesses. You know, they've, they've diversified into property as part of a wealth creation strategy. They have an element of rental income from it, but they also have the trading income from their business as well. And as you'd expect, Brian, we apply the, the normal haircuts that you would expect in terms of bank value versus market value. So generally, for this type of lending, you know, we would be below 70% of the market value. Could I just push my luck with one other question, just on credit underwriting generally? Could you walk us through... So we've got three or four major banks that have got products that basically interrogate SMEs accounting platforms, which I suspect gives a much better credit underwriting standard than normally we would get. Could you just walk us through. I know that you know tend to use people more than machines, but can you just talk us through what access your clients are getting using AI, using data, to basically be confident that you're picking up any problems in the cash flow of the businesses early? Yeah, well, look, I think, Brian, as you said, taking an API to an accounting platform, it's not as, I think from a credit underwriting perspective, I mean, it's got a lot of challenges, not least, you know, when you're accessing an accounting platform, you're not accessing nicely produced monthly management figures with a profit and loss and balance sheet. You're generally are accessing debits and credits. It's fine if it's one customer, one borrowing entity. You put, you know, ten customers in a group, holding company, subsidiary, affiliated businesses, you have trading businesses, property holding companies, et cetera, it gets far more complicated. For us, yes, I mean, it is old school, but we rely on skilled bankers, actually using the actual accounts produced by the accountant, and will be consolidated appropriately, to make our credit assessment. Now, we are looking going forward as to how we can obviously use AI and direct feeds to accounting platforms to make covenant monitoring easier, and make annual renewals easier. But I think in terms of upfront credit assessment, certainly for the types of lending we do, I think I'm not convinced that the productivity benefits would outweigh the additional risk that you're taking by not, particularly with, as I said, complex groups. Thank you. Thank you, and I would now like to hand the conference back to Chris for any further remarks. Well, look, thank you, everyone. It's been, as I said, a delight as my first set of results as CEO to present what we believe are a very clean set of results. It's been eight years for me since the start of Judo. As I said, building a bank is not for the faint-hearted. It's got lots of different challenges associated with it, but finally, we think the build phase is over. Scale is our best friend, and we've never been more excited about the prospects for our company going forward, so again, thank you for joining us, and I'm sure I'll chat to a lot of you again soon on the roadshow that will follow this. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.