Original-Research: UmweltBank AG (von GBC AG): Buy

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Original-Research: UmweltBank AG - from GBC AG

15.11.2024 / 10:01 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

Group AG.

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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: EUR 10.00

Target price on sight of: 31.12.2025

Last rating change:

Analyst: Cosmin Filker, Marcel Goldmann

Nine months 2024: operating performance in line with expectations; sharp

increase in interest result expected from 2025

For the current financial year 2024, UmweltBank AG has started to report the

most important key figures on a quarterly basis for the first time. Even

though the Q3 figures presented here are missing a comparable figure from

the previous year, they still provide a good interim status for the current

financial year.

After nine months, UmweltBank AG reports net interest income of EUR28.80

million and is thus well on track to achieve the expected increase over the

previous year's figure for the year as a whole. The basis for the increase

in net interest income during the year lies, on the one hand, in the rise in

customer deposits to EUR3.7 billion (31 December 2020: EUR2.8 billion), which

were invested in a higher interest rate environment at higher interest

rates. In addition, legacy treasury holdings were reinvested, which,

according to the company, accounts for a difference of up to 100 basis

points. Although the company recorded new lending business of EUR115 million

in the first three quarters, the total volume of loans fell to EUR3.50 billion

(31 December 2023: EUR3.72 billion) due to repayments and redemptions. Net

interest income is therefore likely to have benefited in particular from the

reallocation of own investments and the investment of customer deposits.

At the same time, the credit institution reported a financial result of

EUR18.10 million after nine months of 2024. This includes the sale of a total

of six wind farm investments and two real estate investments. In principle,

UmweltBank AG plans to sell its investment portfolio in the next three

financial years in order to release equity. Further investment disposals are

planned for the fourth quarter, although the expected income from these

cannot yet be quantified.

Together with commission and trading income of EUR3.10 million, the company

reports total income of around EUR50 million after nine months. This is offset

by total expenses of EUR45.4 million. The expenses also include increased

expenses in connection with investments in marketing and IT. According to

the company, expenses in the range of EUR7-10 million are expected to be of a

one-off nature by the end of the 2024 financial year. Earnings before taxes

as of 30 September 2024 were EUR3.6 million.

With the publication of the Q3 figures for 2024, the management of

UmweltBank confirmed the guidance, according to which a pre-tax result

between EUR -5 million and EUR -10 million is to be achieved for the current

financial year 2024. Total income of around EUR70m is expected to be offset by

total expenses of around EUR75m (including the bank deposit). In the coming

financial year 2025, an improvement in total income should even be

accompanied by a decline in total expenses, which should lead to a

significantly positive pre-tax result again.

During the presentation of the Q3 figures, UmweltBank's CEO Dietmar von

Blücher showed how net interest income should benefit from the repositioning

in treasury. In particular, new investments at better conditions should

improve net interest income in the 2025 financial year to between EUR65

million and EUR70 million, an increase of over EUR20 million compared to the

previous year. By contrast, the financial result, which is still benefiting

in the current financial year from a high contribution from the sale of

investments, is expected to decline. Although the company still plans to

gradually reduce its investment portfolio, it is not possible at present to

forecast the expected contribution to earnings.

In our adjusted forecasts, we take into account a stronger development of

the interest result, particularly for the estimate years 2025 and 2026, but

at the same time reduce our forecasts of the financial result. Overall, we

expect total income to increase from EUR57.33m (2023) to EUR70.74m (2024e),

EUR77.97m (2025e) and EUR87.13m (2026e). As we expect costs to rise at a

disproportionately low rate from 2025, UmweltBank AG should return to

profit.

On the basis of the adjusted valuation according to the residual income

model, we have determined a new fair value of EUR10.00 (previously: EUR9.63). We

are maintaining our BUY rating.

You can download the research here: http://www.more-ir.de/d/31323.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: 15.11.24 (7:30 am)

Date (time) first transmission: 15.11.24 (10:00 am)

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2030711 15.11.2024 CET/CEST

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