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

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Original-Research: UmweltBank AG - from GBC AG

29.09.2025 / 11:30 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: GBC Resesearch (Initial Coverage)

Recommendation: BUY

Target price: EUR9.50

Target price on sight of: 31.12.2026

Last rating change:

Analyst: Cosmin Filker, Marcel Goldmann

Capital increase significantly improves equity base, laying the foundation

for higher earnings and improved results

With its latest capital increase, UmweltBank AG generated gross issue

proceeds of EUR20.66 million. The newly raised equity capital is to be used

for the further expansion of the lending business, with the focus on

strengthening the equity base. After applying CRR III, the equity ratio as

at 30 June 2025 was 15.9%, leaving only a small buffer above the regulatory

requirement of 15.6%. With risk-weighted assets (RWA) remaining unchanged,

the equity ratio is likely to have risen to 16.6% following the capital

increase, resulting in a higher buffer against the capital requirement.

UmweltBank AG's current strategy is to improve its risk profile while

simultaneously increasing profitability. The focus here is on growth in

customer deposits, which can be invested at low risk with the ECB at a

maturity-matched interest margin of 100 bps to130 bps. Customer deposits,

which stood at around EUR3.9 billion as at 30 June 2025, are expected to rise

to EUR5.9 billion by 2028. The green current account introduced in July 2025

is expected to make a significant contribution to this. The planned

introduction of investment advice and targeted marketing measures are also

expected to contribute to the planned customer growth.

The planned reduction in shareholdings, most of which are to be sold by the

end of 2026, is also expected to contribute to improving risk. As capital

requirements have increased due to higher risk weighting, particularly

following the application of CRR III, the reduction in investments is

expected to further improve the capital ratio. In addition, the funds freed

up can be used to expand the lending busine

UmweltBank AG's lending business recently suffered from low equity buffers

and declined slightly despite high demand. According to the company's plan,

the lending volume is expected to increase to up to EUR4.0 billion by 2028 (30

June 2025: EUR3.2 billion). This will be based on the funds freed up from the

sale of investments and the improvement in equity as a result of the

expected positive annual results. In addition, capital is also to be

conserved by expanding the syndicated loan business, which has lower equity

backing requirements.

With the publication of the half-year figures for 2025, the management of

UmweltBank AG confirmed its earnings forecast for the 2025 financial year.

According to this, pre-tax earnings of between EUR5 million and EUR10 million

are expected. For 2025 as a whole, a further increase in net interest income

to between EUR60 million and EUR65 million, net financial income to between EUR18

million and EUR20 million, and net commission and trading income to between EUR7

million and EUR11 million is expected. However, this is offset by further risk

provisions in the range of EUR10 million to EUR15 million.

The focus is particularly on the expected increase in net interest income,

which is based on a planned expansion of the deposit business. By the end of

2025, this is expected to grow significantly to EUR4.3 billion (as at 30 June

2025: EUR3.5 billion). The 'UmweltGiro' current account introduced in June

2025, which is expected to attract a large number of new customers, is

expected to play a significant role in this. Also worth mentioning is the

termination of the Bafin special representative's activities. Although the

capital requirements will remain in place for the time being, they could be

reduced in the future, which should have a positive effect on lending.

By the end of our forecast period (2027e), we expect net interest income to

rise further to EUR85.35 million. While net financial income is likely to

become less significant following the sale of the majority of the

investments, we expect net commission and trading income to increase to

EUR11.24 million by the 2027 financial year. This development is particularly

related to expected bond and ETF issues and the planned expansion of the

fund business. With only a disproportionately low increase in costs, we

expect pre-tax profit to improve to EUR9.37 million (2025e), followed by

EUR16.11 million (2026e) and EUR24.18 million (2027e). After two suspensions of

dividend payments, a dividend is to be paid again for the current 2025

financial year.

We have valued UmweltBank AG using a residual income model. The sum of the

discounted residual income results in a value of EUR392.39 million

(previously: EUR375.04 million). The recent capital increase, which led to an

increase in equity of EUR20.66 million, is responsible for the increase in the

fair enterprise value. However, as this is now spread across 41.28 million

shares (previously: 36.06 million shares), the fair enterprise value per

share of EUR9.50 (previously: EUR10.40) is below the pre-money value. This is

understandable, as the capital increase was carried out at a subscription

price of EUR4.00 per share, which is accompanied by a dilution effect compared

to the previously determined fair value per share. We continue to assign a

'BUY' rating.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=d0fec6a2552786fc82cc57ab54d89520

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: 29.09.2025 (8:40 am)

Date (time) first transmission: 29.09.2025 (11:30 am)

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2204800 29.09.2025 CET/CEST

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