UmweltBank AG: GBC AG Recommends BUY Rating

GBC AG has issued a research report on UmweltBank AG, assigning a BUY rating with a target price of €9.60 per share by the end of 2024. The analysis reflects an optimistic outlook, despite recent financial challenges.

UmweltBank AG experienced a decline in new lending, dropping to €459 million from €623 million. This was partly due to an increased capital surcharge, which restricted higher lending volumes. Additionally, the bank's net interest income fell to €41.11 million, impacted by increased interest expenses for ECB and KfW funds.

The financial results were also affected, with a significant drop to €7.17 million. The high costs associated with changing the core banking system, totaling €10.14 million, further reduced EBT to €1.10 million. Looking forward, 2024 is considered a year of transformation with extensive investments in technology and organizational structure.

By 2025, a swift return to profitability is forecast, with an expected EBT of €5.75 million. The subsequent year should see an EBT increase to €20.49 million. This outlook is supported by the growth in customer deposits and the anticipated normalization of capital surcharges.

The valuation of UmweltBank AG, based on a residual income method, indicates a fair value of €9.60 per share. With a current share price of €6.44, GBC AG maintains its BUY recommendation.