Märkte & Kurse

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Original-Research: UmweltBank AG - from GBC AG

07.04.2025 / 10:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of GBC AG to UmweltBank AG

     Company Name:                UmweltBank AG
     ISIN:                        DE0005570808

     Reason for the research:     Research Comment
     Recommendation:              Buy
     Target price:                10.40 EUR
     Target price on sight of:    31.12.2025
     Last rating change:
     Analyst:                     Cosmin Filker, Marcel Goldmann

Preliminary figures for 2024 in line with guidance, return to profitability
expected from 2025 onwards

According to the preliminary figures published as at 31 March 2025,
UmweltBank AG significantly improved its total income compared to the
previous year, as expected. This was due in particular to net interest
income, which at EUR 44.95 million (previous year: EUR 41.11 million) was
slightly above our expectations (old GBC forecast: EUR 43.44 million). This is
likely to have benefited primarily from the strong increase in customer
deposits to EUR 3,824 million (31/12/2013: EUR 2,854 million). By investing
customer deposits at matching maturities (ECB investment), UmweltBank AG is
able to achieve an interest margin of around 100 basis points, meaning that
a higher volume of deposits automatically leads to higher interest income.

At EUR -8.52 million (previous year: EUR -5.61 million), earnings before taxes
and reserves were within the company's guidance range (EUR -5 million to EUR -10
million). In our previous forecast, we had assumed a pre-tax result of EUR
-5.76 million. The higher total income of EUR 59.02 million (previous year: EUR
52.23 million) was offset by a significant increase in total expenses
totalling EUR 67.52 million (previous year: EUR 57.83 million). This is
particularly related to the transformation that was continued in 2024 and
has now been largely completed, which includes the digitalisation of
processes and the completion of the conversion of the core banking system.

As part of the preliminary figures, the Management Board of UmweltBank is
forecasting a return to profitability in 2025 and expects earnings before
taxes in the range of EUR 5 million to EUR 10 million. Dietmar von Blücher had
already provided an outlook on the future drivers of business development at
the Capital Markets Day in mid-January. These were confirmed by the
preliminary figures.

UmweltBank's earnings situation will be characterised by a significant
increase in net interest income. This is due to the expansion of the deposit
business with private customers, which is to be increased to EUR 4.3 billion
in the current financial year and to EUR 5.9 billion by 2028. In addition to
savings products, the deposit business will be driven in particular by the
current account, which is about to be launched. At the same time, the
Management Board of UmweltBank expects the lending volume to move sideways,
but expiring loans are to be replaced by new loans at improved conditions,
which should be reflected in an increase in net interest income. New lending
business in the range of EUR 250 million to EUR 350 million is expected for the
current financial year. An expansion to EUR 650 million is planned by 2028.
The lending business remains subject to capital restrictions, which will be
further tightened by the implementation of CRR III.

The expected increase in net interest income and net commission and trading
income will initially be offset by a disproportionately low increase in
administrative expenses. This is against the backdrop of the transformation
implemented in recent years, which should lead to a significant decrease in
administrative expenses from 2025 onwards. We expect administrative expenses
to increase again in subsequent years due to rising marketing expenses and
higher IT expenses.

As part of this study, we have refined our forecasts for the current and
coming financial year and, for the first time, formulated a forecast for the
2027 financial year. We are assuming a gradual, significant increase in
total income, which will be offset by a disproportionately low increase in
costs. According to our estimates, the cost-income ratio will fall below the
100% threshold in the 2025 financial year at 89.7% and fall significantly to
76.6% by the 2027 financial year.

The sum of the discounted residual earnings results in a value of EUR 370.80
million. With 35.66 million shares outstanding, this results in a fair
enterprise value per share of EUR 10.40 (previously: EUR 10.00), which
corresponds to a slight increase in the target price. This is due in
particular to the first-time inclusion of the estimates for the 2027
financial year, which provides a higher basis for calculating the terminal
value than the 2026 financial year. Based on the current share price, we
continue to assign a BUY rating.



You can download the research here: http://www.more-ir.de/d/32192.pdf

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Beim oben analysierten Unternehmen ist folgender möglicher
Interessenkonflikt gegeben: (1,4,5a,6a,7,11); Einen Katalog möglicher
Interessenkonflikte finden Sie unter:
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Date (time) Completion: 07.04.2025 (8:34 am)
Date (time) first transmission: 07.04.2025 (10:30 am)

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