REG-TCS Group Holding PLC TCS Group Holding PLC Announces 1Q17 IFRS Results and Interim Dividend Payment <Origin Href="QuoteRef">TCSq.L</Origin>

TCS HoldingAnnouncement

30/05/2017 08:05

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   TCS Group Holding PLC / 1st Quarter Results
   TCS Group Holding PLC Announces 1Q17 IFRS Results and Interim Dividend
   Payment

   30-May-2017 / 09:00 CET/CEST
   Dissemination of a Regulatory Announcement, transmitted by EquityStory.RS,
   LLC - a company of EQS Group AG.
   The issuer is solely responsible for the content of this announcement.

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   TCS Group Holding PLC Announces
   1Q 2017 IFRS Results and Interim Dividend

   Moscow, Russia - 30 May 2017. TCS Group Holding PLC (TCS LI) (the
   'Group'), Russia's leading provider of online retail financial services,
   including Tinkoff Bank and Tinkoff Insurance, today announces its interim
   condensed consolidated IFRS results for the first three months ended 31
   March 2017.

   1Q 2017 KEY FINANCIAL HIGHLIGHTS

   - Net interest income increased by 35% y-o-y to RUB 9.9 bn (1Q16: RUB 7.3
   bn)

   - Profit before tax grew by 77% to RUB 4.4 bn (1Q16: RUB 2.5 bn)

   - Net income increased by 79% to RUB 3.4 bn (1Q16: RUB 1.9 bn)

   - Net interest margin up to 26.6% (1Q16: 25.4%)

   - Cost of risk decreased to 7.6% (1Q16: 9.5%)

   - Total assets increased by 0.8% to RUB 176.8 bn (YE16: RUB 175.4 bn)

   - Net loans up by 8% to RUB 111.5 bn (YE16: RUB 102.9 bn)

   - Gross loans and advances to customers up by 7% to RUB 129.4 bn (YE16:
   RUB 120.4 bn)

   - Share of non-performing loans (NPLs) down to 9.6% (YE16: 10.2%)

   - Customer accounts at RUB 123.3 bn (YE16: RUB 124.6 bn)

   - The Group is well capitalised with CBR N1 capital adequacy ratio at
   12.7% as of 1 April 2017.

   KEY BUSINESS HIGHLIGHTS FOR 1Q17

   - In February 2017, Moody's upgraded Tinkoff Bank's rating to B1/Stable

   - In February 2017, Tinkoff Bank was named the 'Bank of the Year 2016' by
   Banki.ru, Russia's leading online financial news portal

   KEY BUSINESS HIGHLIGHTS POST 1Q17

   - As of 1 May 2017, Tinkoff Bank was the second largest bank in Russia by
   non-delinquent credit card portfolio size with an 11% market share

   - In April 2017, Tinkoff Bank announced the launch of its own mobile
   virtual network operator

   - In April 2017, Tinkoff Bank successfully placed a RUB 5 bn bond with a
   9.65% coupon

   - In April 2017, Tinkoff Bank joined the Russian FinTech Association

   - In April 2017, Tinkoff SME reached a milestone of 100,000 customers

   - In May 2017, Tinkoff Bank was assigned A(RU) rating with a stable
   outlook by ACRA, Analytical Credit Rating Agency

   First Interim Dividend Announcement

   In line with the Group's dividend policy, the Group's Board of Directors
   has today approved the 1Q 2017 interim dividend of USD 0.17 per share/per
   GDR (with each GDR representing one class A share) with a total amount
   allocated for dividend payment of around USD 31.0 mn (RUB 1.7 bn).

   Subject to London Stock Exchange regulations, the dividend will be payable
   on 19 June 2017 to those GDR holders on the Group's register as at the
   record date of 16 June 2017. The ex-dividend date will be 15 June 2017.

   According to the terms of the GDR deposit agreement, holders of the
   Group's GDRs will receive their dividends approximately 6 business days
   after the payment date.

   Oliver Hughes, CEO of Tinkoff Bank, commented:

   'In the first quarter, we delivered a strong net income of RUB 3.4 bn on
   the back of the solid expansion of the loan book along with noticeable
   growth in fee and commissions income. With ROE of 43%, this reaffirms our
   status as one of the most profitable banks globally.

   We expect that this year our key non-credit business lines, Tinkoff SME,
   debit cards, and Tinkoff Mortgage, will break even, whilst all non-credit
   business lines have contributed 15.4% to the Group's total revenue in the
   reporting period. We see new opportunities for synergy and growth, and
   announced the launch of Tinkoff MVNO.

   Robust growth of our business increasingly requires more human resources,
   and we are hiring not only in Moscow, but also in major Russian cities. In
   addition to the Tinkoff Development Hub launched in St. Petersburg in late
   2016, we have opened new development hubs in Nizhny Novgorod, Novosibirsk,
   and Yekaterinburg. This will help us intensify production cycle and reduce
   time-to-market for new products.

   Five months into 2017, the Group is well on track to deliver its full year
   targets. In line with our dividend policy, the Board has approved a
   dividend of RUB 1.7 bn.'

   FINANCIAL AND OPERATING REVIEW

   RUB bn                                    1Q17 1Q16 Change
   Credit cards issued ('000 pcs)             450  290    55%
   Credit card                               54.5 35.5    54%
   transactions
   Net interest income                        9.9  7.3    35%
   Net interest income after loan impairment  7.5  4.9    55%
   Profit before tax                          4.4  2.5    77%
   Net income                                 3.4  1.9    79%

    

   RUB bn                              31 March 31 December   Change
                                           2017        2016
   Total Assets                           176.8       175.4       1%
   Net loans and advances to customers    111.5       102.9       8%
   Cash and treasury portfolio             45.5        49.5     (8%)
   Total Liabilities                      143.3       145.9     (2%)
   Customer accounts                      123.3       124.6     (1%)
   Total Equity                            33.5        29.5      13%
   Tier 1 capital ratio                   16.8%       14.8% 2.0 p.p.
   Total capital ratio                    18.0%       16.3% 1.7 p.p.
   CBR N1 (capital adequacy ratio)        12.7%       11.1% 1.6 p.p.

    

   The Group has delivered a strong set of results for 1Q17. This was due to
   continued improvement in the Russian macroeconomic environment, robust
   performance of its core business, and strong growth of its new business
   lines. As a result, the Group reported a net income of RUB 3.4 bn in 1Q17.

   In 1Q17, the Group issued 450,000 credit cards, whilst the total volume of
   credit card transactions grew by 54% to RUB 54.5 bn (1Q16: RUB 35.5 bn).

   In 1Q17, gross interest income grew by 19% y-o-y to RUB 13 bn (1Q16: RUB
   11 bn) and by 0.3% q-o-q (4Q16: RUB 12.9 bn). Gross interest yield
   decreased to 39.3% in 1Q17 due to a seasonally higher cost of risk.

   In 1Q17, the cost of borrowing continued to decrease to 8.4% from 9.7% in
   4Q16 and from 12.2% in 1Q16 as expensive deposits from 2015 were
   completely rolled off the books and the Group gradually decreased the
   deposit rates along with other peers.

   Interest expense dropped by 16.8% y-o-y to RUB 2.9 bn in 1Q17 (1Q16: RUB
   3.5 bn).

   In 1Q17, net interest income grew by 35% y-o-y to RUB 9.9 bn (1Q16: RUB
   7.3 bn) and by 4% q-o-q (4Q16: RUB 9.5 bn). The net interest margin stood
   at 26.6% in 1Q17. Risk-adjusted NIM increased to 20.2% in 1Q17 (1Q16:
   16.9%).

   The Group continues to prioritise its credit risk management. In 1Q17, the
   cost of risk amounted to 7.6% reflecting its usual seasonal spike (1Q16:
   9.5%, 4Q16: 5.0%).

   The Group's effort to diversify its income sources continued to yield
   positive results, with 15.4% of the Group's revenue for 1Q17 generated
   from non-credit sources. In 1Q17, fee and commission income increased by
   52% to RUB 2.7 bn. This was due to the further development of non-credit
   business lines, primarily debit cards, online acquiring, and SME services
   (1Q16: RUB 1.8 bn). The Group expects this upward trend to continue
   further with the ongoing development of its Tinkoff.ru financial
   supermarket and with new business lines breaking even in 2017, including
   Tinkoff SME, Tinkoff Mortgage, and debit cards. The Group's current
   accounts business continues to grow attracting mass-affluent customers. As
   of 1 April 2017 the Group had almost 2 mn customers with current accounts
   with a total balance of RUB 48 bn across all their accounts. Current
   accounts generated RUB 0.6 bn of fee and commission income for the Group
   in 1Q17. In 1Q17, the Group doubled the number of its SME customers to
   over 90,000 in total, with their balances amounting to over RUB 7.3 bn in
   1Q17. In 1Q17, the Group facilitated over RUB 0.9 bn mortgage loans
   through its Tinkoff Mortgage platform. Tinkoff Investments also grew
   steadily in 1Q17, with 25% of all new brokerage accounts in Russia opened
   with Tinkoff Investments.

   In 1Q17, operating expenses increased by 38% y-o-y to RUB 5.3 bn due to
   continued investment in the Tinkoff.ru financial supermarket.
   Cost-to-income ratio stood at 43.1% (1Q16: 43.3%).

   In 1Q17, net income grew by 79% to RUB 3.4 bn (1Q16: RUB 1.9 bn) driven by
   robust growth of our core business and continued improvement in the
   portfolio quality. As a result, ROE for 1Q17 amounted to 43%.

   In 1Q17, the Group continued to maintain a healthy balance sheet with
   total assets up by 0.8% YTD to RUB 176.8 bn (YE16: RUB 175.4 bn) and by
   20.5% y-o-y (1Q16: RUB 146.8 bn).

   The Group's gross loan book grew 7.4% YTD to RUB 129.4 bn (YE16: RUB 120.4
   bn, 1Q16: RUB 104.9 bn) due to an ongoing effort to increase organic
   customer acquisition, resulting in over 340,000 new customers acquired in
   1Q17.

   In 1Q17, the Group's net loan book continued its steady growth despite the
   tight underwriting policy and increased by 8% YTD to RUB 111.5 bn (YE16:
   RUB 102.9 bn). The net loan book amounted to 63% of the Group's total
   assets in 1Q17. Following its credit card portfolio growth, Tinkoff Bank
   expanded its market share to 11% as of 1 May 2017, further strengthening
   its number two position in Russia's credit card market.

   The quality of the Group's portfolio continued to improve with the NPL
   ratio having dropped to 9.6% in 1Q17 from 10.2% in 4Q16. The Group's loan
   loss provision coverage stayed at 1.4 times non-performing loans.

   In 1Q17, customer accounts were down by 1% YTD to RUB 123.3 bn (YE16:
   124.6 bn). This was due to seasonal factors as well as a consistent
   reduction in Tinkoff Bank's deposit rates in line with the market trend
   throughout 2016 and 2017.

   In 1Q17, the Group continued to maintain a robust capital position with
   the statutory CBR N1 total capital ratio of 12.7%, well above the required
   level.

   In 1Q17, the Group's total equity increased by 13.4% YTD to RUB 33.5 bn.
   The Group's Core Tier 1 (or N1.1) and Tier 1 (or N1.2) capital ratios both
   stood at 9.4%, well above the 5.75% and 7.25% minimum requirements
   respectively.

   ***

   The management team will host an investor and analyst conference call at
   15.00 UK time (17.00 Moscow time, 10.00 U.S. Eastern Daylight Time), on
   Tuesday, 30 May 2017.

   The press release, presentation and financial statements will be available
   on the Tinkoff Bank website at
    1 https://www.tinkoff.ru/eng/investor-relations/results-and-reports/

   To participate in the conference call, please use the following access
   details:

   Conference ID                        3795170
   Russian Federation - Local           +7 495 213 1767
   Russian Federation - Toll Free       8 800 500 9283
   United Kingdom - Local               +44 (0)330 336 9105
   United Kingdom - Toll Free           0800 358 6377
   United States of America - Local     +1 719-457-2086
   United States of America - Toll Free 800-347-6311

    

   A live webcast of the presentation will be available at:
    2 http://www.audio-webcast.com/cgi-bin/visitors.ssp?fn=visitor&id=4623

   Please register approximately 10 minutes prior to the start of the call.

    

   For enquiries:
   Tinkoff Bank                   Tinkoff Bank
   Darya Ermolina                 Larisa Chernysheva
   Head of PR                     IR Department
   + 7 495 648-10-00 (ext. 2009)  + 7 495 648-10-00 (ext. 2312)
    3 d.ermolina@tinkoff.ru        4 ir@tinkoff.ru
   FTI Consulting London         
   Elena Kalinskaya/Leonid Fink                   
   +44 (0) 020 3727 1000

    

   About the Group

   TCS Group Holding PLC is an innovative provider of online retail financial
   services operating in Russia through a high-tech branchless platform. The
   Group has also developed a "smart courier" network covering almost all
   cities and towns in Russia which allows next day delivery to many
   customers.

   Tinkoff Bank's product range includes daily banking (credit and debit
   cards, payments, money transfers), savings, investments, loyalty
   programmes, travel services, SME services, mortgage platform, and
   insurance. With its special focus on mobile business, the bank offers
   mobile applications both for its customer base (Mobile Bank) and beyond it
   (Traffic Fines, MoneyTalk, Card 2 Card instant money transfers).

   Tinkoff is transitioning to become an online financial marketplace,
   Tinkoff.ru, which offers an entire range of both own brand and partner
   retail financial services via mobile and desktop.

   As at 1 May 2017, the bank was the second largest player in the Russian
   credit card market, with a market share of 11%. The 1Q17 IFRS net income
   of the parent company, TCS Group Holding PLC, which includes Tinkoff Bank
   and the insurance company Tinkoff Insurance, amounted to RUB 3.4 bn, ROE
   stood at 43%.

   Banki.ru, Russia's largest financial news portal, named Tinkoff Bank the
   Bank of the Year 2016. In October 2016 Tinkoff Bank was named the largest
   independent global direct bank by Frost & Sullivan. In 2015 and 2016, the
   Global Finance magazine named Tinkoff Bank as the Best Consumer Digital
   Bank in Russia. In 2016, the bank also won Global Finance's Best
   Integrated Consumer Bank Site award and was named the Best Digital Bank in
   the CEE by Euromoney. The bank's mobile application was recognised as the
   best in Russia by Markswebb Rank & Report for three consecutive years in
   2014, 2015 and 2016, and by Deloitte for four consecutive years from 2013
   to 2016.

   Forward-looking statements

   Some of the information in this announcement may contain projections or
   other forward-looking statements regarding future events or the future
   financial performance of the Group and Tinkoff Bank. You can identify
   forward looking statements by terms such as "expect", "believe",
   "anticipate", "estimate", "intend", "will", "could," "may" or "might", the
   negative of such terms or other similar expressions. The Group and Tinkoff
   Bank wish to caution you that these statements are only predictions and
   that actual events or results may differ materially. The Group and Tinkoff
   Bank do not intend to update these statements to reflect events and
   circumstances occurring after the date hereof or to reflect the occurrence
   of unanticipated events. Many factors could cause the actual results to
   differ materially from those contained in projections or forward-looking
   statements of the Group and Tinkoff Bank, including, among others, general
   economic conditions, the competitive environment, risks associated with
   operating in Russia, rapid technological and market change in the
   industries the Group operates in, as well as many other risks specifically
   related to the Group, Tinkoff Bank and their respective operations.

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   Language:      English
   Company:       TCS Group Holding PLC
                  2nd Floor, Sotiri Tofini 4, Agios Athanasios
                  4102 Limassol
                  Cyprus
   Phone:         +7 495 648-10-00
   Fax:           +7 495 645-59-09
   E-mail:        media@tinkoff.ru
   Internet:      https://www.tinkoff.ru
   ISIN:          US87238U2033
   Listed:        Foreign Exchange(s) London, Moscow
   Category Code: QRF
   TIDM:          TCS
   LEI Code:      549300XQRN9MR54V1W18
   Sequence No.:  4242


    
   End of Announcement EquityStory.RS, LLC News Service


   578439  30-May-2017 

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References

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   3. mailto:d.ermolina@tinkoff.ru
   4. mailto:ir@tcsbank.ru


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