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

Classification of GBC AG to UmweltBank AG

Company Name:	UmweltBank AG
ISIN:	DE0005570808
Reason for the research:	Research Comment
Recommendation:	BUY
Target price:	€8.00
Target price on sight of:	31.12.2027
Last rating change:
Analyst:	Cosmin Filker, Marcel Goldmann

Lending business on course for growth – profitability improves Looking at the first nine months of 2026, UmweltBank AG also reported a largely stable trend in net interest income, which stood at €43.79 million (previous year: €43.35 million). In the third quarter of 2026, following a slight decline in the two preceding quarters, a noticeable reversal of the trend was achieved with a 13.8% increase in net interest income. This positive trend in net interest income reflects, on the one hand, the gradual phasing out of special terms and conditions in the deposit business (retail banking), which is likely to have led to a reduction in interest expense. Since October 2025, UmweltBank AG has been offering 3.0% interest on instant access savings as part of a special promotion, originally limited to three months. This initially led to a sharp rise in customer deposits. Owing to the currently more intense competitive environment and following the expiry of the three-month period, there was an outflow of retail customer deposits, which had fallen to approximately €3.7 billion as at 30 September 2026 (31 December 2025: approximately €4.3 billion), a decline greater than expected. During the period when the special rates were in force, the interest earned on deposits placed with the ECB was lower than the promotional deposit rate, resulting in a negative interest margin. The elimination of these ‘customer acquisition costs’ has had a positive impact on net interest income. Corporate banking also contributed to the positive trend in net interest income, having picked up noticeably in the first nine months of 2026. With gross new lending of €324 million, the respective full-year figures for 2025 and 2024 were already exceeded by the end of the first nine months of 2026. The gross new lending volume of €450 million forecast by UmweltBank AG for the full year 2026 is likely to be well within reach, as, according to the company, demand in the renewable energy and property sectors remains high. Thanks to the capital increase carried out in the previous year and the reduced capital requirement, UmweltBank AG is now better placed to selectively meet this high demand. At the same time, UmweltBank AG’s financial result for the first nine months of 2026 fell significantly to €3.61 million (previous year: €14.84 million). The high figure for the previous year was largely due to a one-off item of income arising from a profit distribution by a subsidiary. The net commission and trading income was also slightly below the previous year’s level at €4.98 million (previous year: €5.30 million). This was primarily due to weaker-than-expected income from securities trading and payment transactions. The overall decline in total income to €51.72 million (previous year: €60.72 million) was offset by a significant improvement in administrative expenses to €46.42 million (previous year: €51.59 million). This was driven in particular by the cost-cutting and efficiency programme implemented, which led to a significant reduction in other administrative expenses (IT costs, consultancy and audit fees, other administrative expenses) to €20.36 million (previous year: €29.26 million). This more than offset the increase in staff costs to €25.79 million (previous year: €21.85 million), which was due to the planned expansion of the workforce and salary adjustments. As a result, UmweltBank AG achieved a pre-tax profit of €5.31 million (previous year: €9.13 million) in the first nine months of 2026. The positive trend reflected in net interest income is also evident on a quarterly basis. Following a pre-tax profit of €0.23 million (Q1 2026) and €1.95 million (Q2 2026), the figure for the third quarter stood at €3.13 million. Following the publication of the figures for the first nine months of 2026, the management of UmweltBank has adjusted certain elements of its guidance for the current financial year. Whilst the forecast for net interest income (€60–65 million) and net financial income (€4–8 million) remains unchanged, net commission and trading income is now expected to be lower, at €6–9 million (previously: €10–15 million). This is due to the expected non-placement of two planned bond issues planned for 2026, as well as weaker-than-expected income from the securities business. In view of the continuing intense competition on interest rates and the associated outflows from overnight deposits, management has reduced the forecast for retail customer deposits at the end of 2026 to around €4.0 billion (previously: €4.0–5.4 billion). Together with lower customer growth, total expenses are also expected to fall significantly. With the additional efficiency and cost-cutting programme currently underway, the Management Board of UmweltBank anticipates other administrative expenses of €28–32 million (previously: €32 million). This would offset part of the expected lower net commission and trading income. Furthermore, due to the ongoing recovery of individual property finance facilities, the company expects reversals of previously recognised loan loss provisions, meaning that a positive contribution to earnings from risk provisions of between €0 and €4 million is forecast for the full year. Overall, these effects result in an unchanged EBT forecast of €12.5–17.5 million, with earnings expected to be at the lower end of the forecast range. We have adjusted our forecasts for the current financial year 2026 in line with the updated company guidance. Given lower commission and trading income, we anticipate lower expenses and therefore expect a virtually unchanged pre-tax profit of €11.72 million (previously: €12.02 million). Our estimates for the coming financial years remain unchanged. On 10 December 2026, the company will present a strategic plan extending to the financial year 2031. This will also involve a reassessment of the previous long-term growth targets, which could, under certain circumstances, lead to an adjustment of our forecasts for the coming financial years. Our marginal forecast adjustment has a negligible impact on the fair value per share determined using the residual income model. We therefore confirm the price target of €8.00 and reiterate our ‘BUY’ rating.

You can download the research here: 20261029_UmweltBank_Comment_engl Contact for questions: GBC AG Halderstraße 27 86150 Augsburg 0821 / 241133 0 research@gbc-ag.de ++++++++++++++++ Disclosure of potential conflicts of interest pursuant to Section 85 of the German Securities Trading Act (WpHG) and Article 20 of the Market Abuse Regulation (MAR). The following potential conflict of interest exists in relation to the company analysed above: (1,4,5a,7,11). A list of potential conflicts of interest can be found at: https://www.gbc-ag.de/de/Offenlegung Note on issuer-sponsored research: This research report is issuer-sponsored research and has been prepared in accordance with the EU Code of Conduct for issuer-sponsored research. +++++++++++++++ Date (time) Completion: 29.10.2026 (09:47 am) Date (time) first transmission: 29.10.2026 (11:00 am)