Judo Capital Holdings (ASX:JDO) shares have dropped as much as 15.8% down to A$1.1, marking their lowest value since June 27.

The company, specializing in banking products and services, has recently posted a FY pretax profit of A$107.5 million.

This is a well-executed result, according to Citi.

However, all the attention is now shifting towards FY24.

The brokerage indicates that exceptionally strong lending growth often raises concerns over future asset quality among investors, and it points out a weaker-than-expected outlook.

Although the Australian economy continues to show resilience, Judo acknowledges potential ongoing risks brought on by the impact of high interest rates and inflation.

Some sectors are expected to be more affected than others.

Disclosures have revealed that Judo anticipates an unspecified, but seemingly substantial, NIM reduction in FY24 as the company raises funds to repay the facility in June 2024.

This is projected to result in consensus earnings downgrades in FY24, says Citi.

As of the last close, JDO shares are down 4.5% this year.

Judo Capital Holdings is a banking product and services company specializing in lending services for businesses.