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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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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