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

Classification of GBC AG to UmweltBank AG

Company Name:	UmweltBank AG
ISIN:	DE0005570808
Reason for the research:	Research Comment
Recommendation:	Buy
Target price:	EUR 9.40
Target price on sight of:	31.12.2025
Last rating change:
Analyst:	Cosmin Filker, Marcel Goldmann

Operational progress, strengthened capital base and sustained positive earnings performance

UmweltBank AG achieved a number of milestones in the first nine months of 2025. Particularly noteworthy is the termination of the activities of the special representative appointed by BaFin, which is seen as clear evidence of the progress made. In addition, the bank introduced its first current account in the third quarter of 2025 on the basis of the digitalisation of its processes. Finally, following its scale listing in August 2025, the company generated gross issue proceeds of €20.66 million as part of a capital increase. This improves the capital buffer and increases flexibility in granting new loans.

As expected, UmweltBank AG continued its growth course in the third quarter of 2025 from an operational perspective. After nine months, total income rose significantly to €60.72 million (previous year: €49.40 million). The increase in net interest income to €43.35 million (previous year: €28.78 million) made a particular contribution to this. This is mainly attributable to higher deposit inflows, which resulted in higher interest margins. In addition, the company achieved improvements in its treasury portfolio. Net commission and trading income also rose significantly to €5.30 million (previous year: €3.13 million). Among other things, the UmweltBank ETF – Green & Social Bonds Euro launched in the third quarter is likely to have been an important driver here. The financial result of €14.84 million (previous year: €18.06 million) reflects profit distributions from the sale of two real estate investments. The investments are to be sold off for the most part by the end of 2026, meaning that the financial result is likely to become less significant in future.

Due to the significant increase in earnings, pre-tax profit also rose sharply to €9.13 million (previous year: €3.60 million). Although operating costs increased in the context of transformation and digitalisation, ongoing efficiency programmes also led to a disproportionately low increase in costs.

However, the development of retail customer deposits and the number of customers was slightly below our expectations. In the third quarter, customer deposits actually declined slightly to €3,877 million (30 June 2025: €3,926 million), while the number of customers remained virtually unchanged. This is attributable to the introduction of the current account, which has not yet met expectations. Nevertheless, UmweltBank's management is sticking to its targets of increasing private customer deposits to around €4.3 billion by the end of 2025. To achieve this, deposit growth of around €400 million must be achieved in the fourth quarter. In addition to stronger growth from the introduction of the current account, a new overnight deposit campaign (guaranteed interest rate of 3.0% for three months) is expected to contribute to this.

Corporate banking also fell short of expectations. In the first nine months, UmweltBank AG deliberately acted in a capital-conserving manner, achieving gross new lending of around €73 million (previous year: €115 million). Following the capital increase carried out in September 2025, the company now has a higher capital buffer. It plans to see a significant upturn in new lending business in the fourth quarter of 2025 and expects gross new lending business for the year as a whole to be in the range of €200 million to €250 million (previously: €250 million to €350 million).

UmweltBank AG has confirmed all key forecast KPIs in its nine-month report. Net interest income is still expected to be in the range of €60 to €65 million. However, this assumption is based on ambitious plans for growth in customer deposits and new lending volume in the corporate customer segment. In our view, this could prove to be overly ambitious, which is why we are revising our previous forecast slightly. For the current 2025 financial year, we now expect net interest income of €58.45 million (previously: €60.32 million), which is slightly below the company's forecast range. Our estimates for net financial income and net commission and trading income remain unchanged, however. Our estimates for the following years 2026 and 2027 also remain unchanged. From the 2026 financial year onwards, UmweltBank AG should benefit from the higher capital buffer following the capital increase and be able to expand its lending business more strongly. There are also plans to resume lending to private customers. Finally, a more targeted customer approach should continue the expansion of customer deposits expected for the fourth quarter of 2025.

The reduction in the forecast for net interest income is also reflected in a decrease in the expected pre-tax profit to €8.40 million (previously: €9.37 million) and in the net profit for the year to €5.71 million (previously: €6.37 million). The only slight reduction in the forecasts for the current 2025 financial year has only a marginal impact on Umweltbank's target price determined using the residual income model, which we are reducing slightly to €9.40 (previously: €9.50). We continue to assign a 'BUY' rating.

You can download the research here: 20251103_UmweltBank_Comment_engl

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Date (time) Completion: 03.11.2025 (8:14 am)
Date (time) first transmission: 03.11.2025 (14:00 am)