Original-Research: UmweltBank AG - von GBC AG

Einstufung von GBC AG zu UmweltBank AG

Unternehmen: UmweltBank AG
ISIN: DE0005570808

Anlass der Studie: Research Report (Anno) Empfehlung: BUY
Kursziel: 14.40 EUR
Kursziel auf Sicht von: 31.12.2024
Letzte Ratingänderung:
Analyst: Cosmin Filker, Marcel Goldmann

- Transformation process 'umwelt.neo' makes the Bank future proof - Two transitional years expected
- Growth is expected again from 2025 onwards  
In the past financial year 2022, UmweltBank AG was able to further expand its business volume to € 6,602.1 million (31.12.21: € 6,451.0 million), even in a difficult market environment. The basis for this increase is the newly granted loans in the amount of € 623 million (previous year: € 845 million), which increased the outstanding loan volume to € 3,139.03 million (31.12.21: € 3,072.52 million) and therefore to a new record value. The decreasing dynamics in the volume of new loans is primarily due to a decline in demand in the area of private construction financing, i.e. it is a consequence of the more expensive financing on the one hand and the still high price levels on the other. New loans also decreased in the renewable energy sector, although this also includes the postponement of loans to the current financial year in the amount of € 170 million.  
Based on the expanded loan portfolio, interest income increased to € 74.40 million (previous year: € 70.90 million), the interest result, on the other hand, declined to € 58.79 million (previous year: € 63.24 million). This includes a further reduction of the interest margin to 1.07% (previous year: 1.21%). On the one hand, higher interest rates can be enforced for new loans, but the extensive loan portfolio only leads to a delayed adjustment of interest rates instead. On the other hand, the interest rate increases have made liabilities, which mainly consist of short-term deposits, more expensive. In addition, part of the TLTRO funds at favourable interest rates were repaid.
 
In contrast to the decline in net interest income, UmweltBank AG recorded a significant increase in net commission income and other income to a total of € 34.55 million (previous year: € 12.60 million). The sale of an investment in a wind farm company, which generated net proceeds of approximately € 20 million, played a special role in this development.  
With an EBT of € 39.21 million (previous year: € 38.09 million), UmweltBank AG met expectations. The only slight increase in earnings compared to the significant rise in total income is a result of higher administrative expenses, which include costs for the change of the core banking system (€ 3.6 million) as well as increased expenses from the continued expansion of the workforce. Another factor that led to the increase in costs was the higher allocations to risk provisions for customer loans, which at € 9.29 million (previous year: € 3.26 million) were significantly above the previous year's level.
 
The UmweltBank management considers the current and coming financial years 2023 and 2024 as transitional years, which will be characterised by a declining development of the interest result and increasing expenses. For the current financial year, the Board of Management expects EBT before the formation of reserves to amount to approximately € 20 million. As in the previous business year, proceeds from disposals are expected to contribute significantly to this. Although an increase in the volume of new loans is expected, net interest income should decrease significantly due to the expected decline in the interest margin. Here, too, the effect that interest rate increases being passed on more quickly on the deposit side plays an important role. In addition, the expiry of the ECB's special corona conditions will lead to a further increase in the cost of financing. A noticeable improvement in the interest margin is not expected until 2025.  
The decline in net interest income is to be offset by an increase in net commission income and net trading income. The expansion of sales activities for own funds of the 'UmweltSpektrum' brand as well as an expansion of the issuing business should contribute to this. In addition to the planned increase in awareness of this brand, investments in green projects are also to be expanded, so that the contribution to income and results of business outside of lending, i.e. in the business segments 'securities business' and 'investments', should increase. We expect a decline in income from disposals and thus a decline in other income, so that overall a declining income picture should prevail.
 
On the cost side, the migration costs to the new core banking system, for which investments of around € 10 million are estimated for 2023 and around € 4 million for 2024, are likely to lead to an increase in administrative expenses. In addition, the expansion of the workforce is to be continued. In this respect, the company is undergoing a transformation process in the financial years 2023 and 2024, at the end of which a modern IT infrastructure will be in place from 2025 and more employees will be employed at the new company headquarters 'UmweltHaus'. Finally, from 2025 onwards, significant improvements in earnings and results are to be generated, also against the background of the then-increasing interest margin.
 
For the financial years 2023 and 2024, we expect net interest income of € 49.81 million (2023) and € 53.25 million (2024), which should be below the level of the past two financial years. We do not expect a noticeable increase in the financial result until 2025, driven in particular by an increase in the interest margin and lending. We assume a visible reduction in other income (including commission income) due to the decline in proceeds from disposals, before rising income from investments and securities should lead to an increase from 2024.   
Due to the strong increase in administrative expenses, which include both the higher personnel expenses and the increased transformation costs, we forecast a pre-tax result (before the formation of reserves) of € 20.84 million for the current financial year, which is in line with the company's guidance. After another year of transformation, the pre-tax result should not be above the level of the previous financial years until the 2025 financial year.
 
We have valued UmweltBank within the framework of a residual income procedure. The sum of the discounted residual income results in a value of € 14.40 million (previously: € 14.65 million) per share. The price target reduction is exclusively a consequence of the increased cost of equity capital of 4.97% (previously: 4.20%), resulting from an increase in the risk-free interest rate and the company-specific beta. At a current share price of € 11.20, we continue to give the rating BUY.  

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/27351.pdf

Kontakt für Rückfragen
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: http://www.gbc-ag.de/de/Offenlegung
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Date (time) completion of the study: 17.07.2023 (09:47 am) Date (time) first publication: 17.07.2023 (11:30 am)

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