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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 EQ

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 onward

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) wa

slightly above our expectations (old GBC forecast: EUR 43.44 million). This i

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 i

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 taxe

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 expense

totalling EUR 67.52 million (previous year: EUR 57.83 million). This i

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 i

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 expense

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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR

Beim oben analysierten Unternehmen ist folgender möglicher

Interessenkonflikt gegeben: (1,4,5a,6a,7,11); Einen Katalog möglicher

Interessenkonflikte finden Sie unter:

https://www.gbc-ag.de/de/Offenlegung

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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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