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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 EUR 6,602.1 million (31.12.21: EUR 6,451.0 million),

even in a difficult market environment. The basis for this increase is the

newly granted loans in the amount of EUR 623 million (previous year: EUR 845

million), which increased the outstanding loan volume to EUR 3,139.03 million

(31.12.21: EUR 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 EUR 170 million.

 

Based on the expanded loan portfolio, interest income increased to EUR 74.40

million (previous year: EUR 70.90 million), the interest result, on the other

hand, declined to EUR 58.79 million (previous year: EUR 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 EUR 34.55 million (previous year: EUR 12.60 million). The sale of an

investment in a wind farm company, which generated net proceeds of

approximately EUR 20 million, played a special role in this development.

 

With an EBT of EUR 39.21 million (previous year: EUR 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 (EUR

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 EUR 9.29

million (previous year: EUR 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 EUR 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 EUR 10 million are estimated for 2023 and around

EUR 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 EUR

49.81 million (2023) and EUR 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 EUR 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

EUR 14.40 million (previously: EUR 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 EUR 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)

-übermittelt durch die EQS Group AG.-

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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