Classification of GBC AG to UmweltBank AG

Strong growth achieved across all income and earnings levels

Following the key figures for the first quarter published for the first time on 30 April 2025, UmweltBank AG reported significant growth across all income and earnings levels compared with the previous year. While net interest income rose significantly to €13.66 million (previous year: €7.73 million) as expected on the basis of the recent increase in customer deposits, the increase in net financial income to €12.38 million (previous year: €3.67 million) was well above our expectations. This includes profit distributions from the sale of real estate by a subsidiary. The company plans to sell its entire investment business by 2026, but investment sales are inherently difficult to plan.

The strong increase in the financial result ultimately led to earnings before taxes of €10.28 million (previous year: €-0.13 million), which already exceeds the company's guidance for the full year 2025 (guidance: €5 million to €10 million) after just three months. However, as no further profit distributions are expected for the current financial year and risk provisions in a range of €10 million to €15 million are expected for the rest of the year, the other quarters of the year are expected to show a slightly negative pre-tax result on a cumulative basis, meaning that the guidance remains unchanged.

The private customer business was also characterised in the first quarter by an increase in the number of customers by 4,500 and in customer deposits by €140 million. As at 31 March 2025, private customer deposits amounted to €3.6 billion and remain on track to reach the company's target of €4.3 billion by the end of the 2025 financial year. By 2028, private customer deposits are expected to increase further to €5.9 billion. In addition to savings products and the expansion of the product range in the securities segment, the deposit business is to be driven in particular by the current account. The current account entered the Friends phase in April, before a roll-out is scheduled for mid-2025.

Although, according to the company, demand in the renewable energies and residential real estate sectors remains high in the corporate customer business, new lending started the year as expected on a subdued note at €30 million (previous year: €25 million). In addition to selective lending, the continuing equity restrictions, which will be further tightened by the implementation of CRR III, are also likely to have played a role here. For the year as a whole, the UmweltBank Board of Management continues to expect new lending of €250 million to €350 million, representing a sideways movement in lending volume.

In line with the company's guidance, we are sticking to our earnings estimates. We have only made minor adjustments on the income side, where we are now taking the profit distribution of the subsidiary into account in the financial result. At the same time, we have reduced net interest income to €60.32 million (previously: €65.92 million), which is in line with the company's forecast of €60 million to €65 million. Previously, we had assumed a steady increase in retail deposits over the course of the year. In our updated estimates, we have postponed the increase in private customer deposits following the introduction of the current account to the second half of the year, which will result in a lower average volume of private customer deposits in the current 2025 financial year.

However, as we are maintaining our earnings forecasts unchanged, we also confirm the share price target of €10.40 derived from the residual income model. The rating remains BUY.