Re­se­arch | 26 Juni 2024 00:00

Ori­gi­nal-Re­se­arch: Um­welt­Bank AG – from GBC AG­Clas­si­fi­ca­ti­on of GBC AG to Um­welt­Bank AG

Com­pa­ny Name: Um­welt­Bank AG
ISIN: DE0005570808

Re­ason for the re­se­arch: Re­se­arch Re­port (Anno)
Re­com­men­da­ti­on: BUY
Tar­get pri­ce: 9,60 EUR
Tar­get pri­ce on sight of: 31.12.2024
Last ra­ting ch­an­ge:
Ana­lyst: Cos­min Fil­ker, Mar­cel Gold­mann

- Re­turn to pro­fi­ta­bi­li­ty ex­pec­ted af­ter trans­for­ma­ti­on year 2024
– Rea­lignment be­ars fruit
– In­te­rest mar­gin ex­pec­ted to bot­tom out

With the pu­bli­ca­ti­on of their 2023 An­nu­al Re­port, Um­welt­Bank AG has con­firm­ed the preli­mi­na­ry fi­gu­res pu­blished in March. As pre­vious­ly an­noun­ced, new len­ding busi­ness de­cli­ned and was down from the pre­vious year at € 459 mil­li­on (pre­vious year: € 623 mil­li­on). One re­ason for this was the in­crease in the ca­pi­tal surchar­ge to 3.7% (31.12.22: 1.5%), which pre­ven­ted a hig­her le­vel of new len­ding.

In ad­di­ti­on to lower growth mo­men­tum in lo­ans, fur­ther de­cli­ne in the in­te­rest mar­gin also led to an ex­pec­ted fall in net in­te­rest in­co­me to € 41.11 mil­li­on (pre­vious year: € 58.79 mil­li­on). As the de­po­sit busi­ness has a shorter du­ra­ti­on, it re­acts more stron­gly to in­te­rest rate in­crea­ses, which led to hig­her in­te­rest ex­pen­ses. In ad­di­ti­on, in­te­rest ex­pen­ses for funds bor­ro­wed from the ECB and KfW, which also re­pre­sent an im­portant re­fi­nan­cing block for Um­welt­Bank AG, also in­creased. Par­al­lel to the de­cli­ne in net in­te­rest in­co­me, the fi­nan­cial re­sult fell si­gni­fi­cant­ly to € 7.17 mil­li­on (pre­vious year: € 24.83 mil­li­on). This re­pres­ents a nor­ma­li­sa­ti­on, af­ter the pre­vious year’s fi­gu­re was stron­gly po­si­tively in­fluen­ced by the sale of an in­vest­ment in a wind farm com­pa­ny amoun­ting to around € 20 mil­li­on.

The sharp de­cli­ne in in­co­me was ac­com­pa­nied by an equal­ly sharp rise in cos­ts in the 2023 fi­nan­cial year, which led to a si­gni­fi­cant de­cli­ne in EBT to € 1.10 mil­li­on (pre­vious year: € 39.21 mil­li­on). The main re­ason for the in­crease in cos­ts was the ch­an­ge in the core ban­king sys­tem, which was as­so­cia­ted with ex­tra­or­di­na­ry ex­pen­ses of € 10.14 mil­li­on. In ad­di­ti­on, Um­welt­Bank AG re­cor­ded a si­gni­fi­cant in­crease in per­son­nel cos­ts.

The cur­rent 2024 fi­nan­cial year is to be re­gard­ed as a year of trans­for­ma­ti­on. This is due to the fact that fur­ther in­vest­ments in
tech­no­lo­gy and the or­ga­ni­sa­tio­nal struc­tu­re are plan­ned. In ad­di­ti­on, the fo­cus will be on ex­pan­ding pri­va­te cus­to­mer de­po­sits, which will be ac­com­pa­nied by in­creased mar­ke­ting ex­pen­dit­u­re. The com­pa­ny will also con­ti­nue to push ahead with di­gi­ta­li­sa­ti­on in the cur­rent fi­nan­cial year and in­vest more in this area. The in­vest­ments and sub­se­quent cos­ts in con­nec­tion with the mi­gra­ti­on of the core ban­king sys­tem to­tal­ling € 4 mil­li­on are ex­pec­ted to lead to ear­nings be­fo­re ta­xes of € ‑15 mil­li­on and € ‑20 mil­li­on respectively.The hig­her cos­ts are off­set by a tur­n­around in the in­te­rest and fi­nan­cial re­sult. Um­welt­Bank AG has fo­cus­sed on ex­pan­ding its de­po­sit busi­ness with pri­va­te cus­to­mers, which is al­re­a­dy bea­ring fruit. In the first th­ree months of 2024, around 8,000 new cus­to­mers and cus­to­mer de­po­sits to­tal­ling around € 250 mil­li­on were ac­qui­red. Their aim is to reach the 500,000 cus­to­mer mark by 2028. In­cre­asing cus­to­mer de­po­sits should enable an ex­pan­si­on of the len­ding busi­ness on the one hand and, in par­ti­cu­lar, ge­ne­ra­te in­te­rest in­co­me from the in­vest­ment of cus­to­mer funds (ECB; bonds) on the as­set side​.In fu­ture, their len­ding busi­ness will fo­cus on cor­po­ra­te cus­to­mers. New busi­ness of € 250 mil­li­on is ex­pec­ted for the cur­rent fi­nan­cial year. New len­ding busi­ness is to be in­creased by re­leasing ca­pi­tal tied up in equi­ty in­vest­ments. In ad­di­ti­on, the ca­pi­tal surchar­ge should re­turn to nor­mal le­vels once the re­gu­la­to­ry re­qui­re­ments have been met, which will also enable an in­crease in new len­ding busi­ness. The gross vo­lu­me of new busi­ness is ex­pec­ted to in­crease to over € 1.0 bil­li­on by 2028. Net in­te­rest in­co­me from the len­ding busi­ness should also im­pro­ve in line with the ex­pec­ted in­crease in the in­te­rest mar­gin. The ex­piry of low-in­te­rest lo­ans and the ex­pec­ted sta­ble in­te­rest rate trend should con­tri­bu­te to this.

The fi­nan­cial re­sult should in­crease in the co­ming fi­nan­cial ye­ars, not least due to the con­ti­nuous re­duc­tion in the in­vest­ment busi­ness. Two wind farm in­vest­ments and one pro­per­ty in­vest­ment were al­re­a­dy sold at a pro­fit in the first quar­ter of 2024. Fur­ther dis­po­sals are plan­ned on an op­por­tu­ni­stic ba­sis. Net com­mis­si­on and tra­ding in­co­me should also be­ne­fit from ri­sing cus­to­mer de­po­sits and also in­crease slight­ly.

Fol­lo­wing a si­gni­fi­cant in­crease in to­tal cos­ts in the 2024 fi­nan­cial year, a ra­pid re­turn to pro­fi­ta­bi­li­ty is ex­pec­ted from the co­ming 2025 fi­nan­cial year. We ex­pect EBT of € 5.75 mil­li­on for the co­ming 2025 fi­nan­cial year (2024: € ‑15.90 mil­li­on) and EBT of € 20.49 mil­li­on for the 2026 fi­nan­cial year.

We have va­lued Um­welt­Bank AG using a re­si­du­al in­co­me me­thod and de­ter­mi­ned a fair va­lue of €9.60 per share. Ba­sed on the cur­rent share pri­ce of € 6.44, we con­ti­nue to as­sign a BUY ra­ting.

You can down­load the re­se­arch here:
http://​www​.more​-ir​.de/​d​/​3​0​0​9​9​.​pdf

Cont­act for ques­ti­ons
GBC AG
Hal­der­stra­ße 27
86150 Augs­burg
0821241133 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/​d​e​/​O​f​f​e​n​l​e​g​ung
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Date and time of com­ple­ti­on of the stu­dy: 26.06.2024 (08:45 am)
Date and time of the first dis­se­mi­na­ti­on of the stu­dy: 26.06.2024 (10:00 am)

——————-trans­mit­ted by EQS Group AG.——————-

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.

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

GBC AG
Hal­der­stra­ße 27
86150 Augs­burg

Pho­ne: +49 821 241133–0
E‑mail: office(@)gbc-ag.de

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