The market may be edging higher today but the same cannot be said for one ASX 200 bank stock.

In afternoon trade, its shares are down a massive 19% to $1.44.

Let's find out what is going on.

Which ASX 200 bank stock is crashing?

The stock in question is small business lender Judo Capital Holdings Ltd (ASX: JDO).

Investors have been hitting the sell button in a panic today after it released its third quarter update and revealed a surprising slowdown in its performance.

According to the release, the ASX 200 stock's gross loans and advances (GLA) at the end of March were $11.7 billion. This is up a fraction from $11.6 billion at the end of December, compared to its first half growth rate of 9%, which was 2x system growth at the time. The company explained:

Net growth for Q3 was subdued reflecting normal seasonality, as well as higher run-off primarily due to the residual impacts of proactive portfolio management undertaken during 1H25.

In light of this, management has been forced to downgrade its GLA guidance for FY 2025.

The ASX 200 bank stock now expects its GLA to be between $12.4 billion and $12.6 billion at the end of the year. This is down from its previous guidance of $12.7 billion to $13 billion. It explains:

Growth is expected to be lower than guidance provided at the 1H25 result, given market uncertainty impacting customers, the slower initial ramp up of warehouse lending, and balancing growth and economics.

Margin update

Also weighing on the ASX 200 stock today has been management's commentary on its margins. While it will target a net interest margin (NIM) of 3%, it concedes that lower interest rates could be a stumbling block. It said:

The bank continues to target NIM in 2H25 at the upper end of 2.90 – 3.00%. In addition, and as previously flagged, Judo is targeting an exit NIM of 3%. As discussed in the 1H25 result, further cash rate reductions before 30 June will impact Judo's exit NIM. The impact will be largely temporary as all of Judo's lending and deposit products will reprice over time.

One positive, though, is that management continues to target FY 2025 profit before tax growth of 15%. However, it has flagged that "the operating environment remains volatile", so this is far from guaranteed it seems.

Assuming stable economic conditions, the ASX 200 bank stock is then aiming to deliver 50% profit before tax growth in FY 2026. This is expected to be driven by benefits from significant operating leverage.