REG-TCS Group Holding PLC TCS Group Holding PLC releases highlights for 2Q’22 and 1H’22 performance

TCS HoldingAnnouncement

24/08/2022 15:30

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   TCS Group Holding PLC (TCS)
   TCS Group Holding PLC releases highlights for 2Q’22 and 1H’22 performance

   24-Aug-2022 / 17:25 MSK
   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

    

   TCS Group Holding PLC releases highlights for 2Q’22 and 1H’22 performance

    

    

   LIMASSOL, CYPRUS — 24 August 2022. TCS Group Holding PLC (LI: TCS, MOEX:
   TCSG) (“Tinkoff”, “We”, the "Group", the “Company”), a leading provider of
   online financial and lifestyle services via its Tinkoff ecosystem, today
   announces key performance metrics and trading update for the three months
   and six months ended 30 June 2022.

    

   The entire Tinkoff team continues to work hard while keeping our
   customers' needs at the center of everything we do. We closely watch any
   changes in the external environment and react appropriately, supported by
   our vast sector expertise and our ability to quickly adapt to any new
   challenges and opportunities. Our total assets and total liabilities have
   remained stable with up to 1% growth in 1H’22 relative to the beginning of
   the year, while the company continued to be profitable in both quarters of
   2022, albeit half-yearly net profit reached its lowest level over the last
   five years. The Group continues to maintain a significant liquidity
   cushion and ample capital buffers (almost twice above required minimums),
   which will enable it to adapt further to the changing environment in 2022.

    

   KEY PERFORMANCE METRICS

    

    Key metrics, mn           2Q'22 2Q'21 1Q'22 Y-o-Y     Q-o-Q
                                                Change, % Change, %
   Total customers            24.3  16.7  22.7  46%       7%
   Active customers           17.3  11.5  15.8  50%       9%
   Monthly active users (MAU) 19.5  12.5  17.7  56%       10%
   Daily active users (DAU)   7.5   4.2   6.9   79%       9%

    

   FINANCIAL AND OPERATING REVIEW

    

   RUB bn                    2Q’22  2Q’21 ∆    1Q’22  ∆    1H’22  1H’21  ∆
   Interest income             52.2  39.9  31%   49.5   6%  101.6   75.2  35%
   Interest expense          (21.5) (6.2) 245% (11.8)  82% (33.2) (11.7) 183%
   Fee and commission income   32.2  19.6  64%   36.3 -11%   68.5   36.1  90%
   Fee and commission         (8.7) (9.1)  -5% (13.9) -37% (22.6) (16.8)  34%
   expense

    

   Balance Sheet,     30.06.2022 31.03.2022  ∆  31.12.2021  ∆  30.06.2021  ∆
   RUB bn
   Loans and advances        584        616 -5%        606 -4%        507 15%
   to customers*
   Customer accounts         983        922  7%        946  4%        707 39%

    

   *Net portfolio

    

   In 2Q’22, the Group’s total revenue grew materially showing strong
   double-digit percentage growth year-on-year, supported by continuous
   customer base expansion.

    

   Interest income increased by 31% year-on-year to RUB 52.2 bn in 2Q’22
   (2Q’21: RUB 39.9 bn), driven by the continued growth of our loan portfolio
   mainly in 2H’21, increase of the customer base and expansion of the credit
   product range.

   Gross loan interest yield decreased slightly year-on-year following trend
   of the previous years. The interest yield on the Group’s securities
   portfolio slightly increased due to higher rates in bond and money
   markets.

    

   In 2Q’22, interest expense rose by 245% year-on-year to RUB 21.5 bn
   (2Q’21: RUB 6.2 bn), driven by a marked increase in our cost of borrowing,
   owing to the monetary policy environment.

    

   Fee and commission income increased by 64% year-on-year in 2Q’22 to RUB
   32.2 bn (2Q’21: RUB 19.6 bn), supported mainly by the continued growth of
   our retail and SME banking businesses. At the same time, fee and
   commission expense declined by 5% year-on-year in 2Q’22 to RUB 8.7 bn
   (2Q’21: RUB 9.1 bn) due to lower payment systems costs.

    

   In 2Q’22, net interest margin experienced a single-digit decline in
   percentage points terms year-on-year, primarily driven by rising funding
   costs.

    

   Cost of risk increased materially year-on-year in 1H’22 owing to
   conservative macro-related provisioning, with the relative size of the
   increase comparable to the increase experienced in 1H’20.

    

   Our non-credit business lines continue to deliver an increasing share of
   our revenue and bottom line thanks to growth of the customer base, our
   widened range of product offerings and continued monetisation efforts.

    

   The Group remains profitable. In 1H’22, net profit decreased substantially
   year-on-year, implying single digit ROE (return on equity), primarily
   impacted by growth in funding costs and conservative provisioning.

    

   In 2Q’22, the Group maintained a healthy balance sheet with total assets
   slightly growing compared to the end of 2021.

    

   In 1H’22, the net loan book decreased by 4% YTD to RUB 584 bn (31 Dec’21:
   RUB 606 bn). NPL ratio increased by low single digit percentage points
   compared to the end of 2021.

    

   The Group’s customer accounts increased by 4% YTD to RUB 983 bn (31
   Dec’21: RUB 946 bn).

    

   Tinkoff’s total equity grew by 9% compared to the end of 2021. In 1H’22,
   all statutory capital ratios significantly improved. Group’s Basel III
   CET1 ratio remained strong, being stable year-on-year.

    

   The Group continues to honor its obligations to bondholders and aims to
   make the coupon payments under its two outstanding Eurobonds in due course
   in September subject to regulatory environment. Given current limitations
   in the operation of the capital markets infrastructure, the Group will not
   be able to execute a call option for its 9.25% perpetual Eurobond in
   September 2022. To ensure coupon delivery to all bondholders, settlement
   to Russian residents will be made in Rubles via local settlement agents.

    

   2Q’2022 AND POST-REPORTING PERIOD OPERATING HIGHLIGHTS

    

     • The Group had over 19.7 mn total Tinkoff Black customers as of 1 July
       2022.

     • In April, Tinkoff launched an annual scholarship programme for
       talented students of technical departments at Russian universities
       with the total scholarship budget of RUB 20 m for 2022.
     • In April, Tinkoff launched the second Support Will Come grant
       competition with a total budget of RUB 20 million for Russia’s
       non-profit organisations. 368 applications were submitted, and 21
       grant winners were selected in July.
     • In April, Tinkoff Investments launched on-exchange trading of gold and
       silver.
     • In May, Tinkoff launched Tinkoff Pay, an instant payment service that
       enables quick, easy, convenient and secure purchases of products and
       services in online and offline stores without entering card details.
     • In June, Tinkoff Credit Broker, our service for instalment payments
       and consumer loans, launched Self ID, a technology that facilitates
       paperless signing of documents. Customers of any bank can now verify
       their identity by simply taking several photographs of their passport
       to make purchases online using instalment plans or loans
     • In July, Tinkoff launched universal Tinkoff ID, a service for quick
       and secure authentication and unified access to any service on the
       Russian internet. Tinkoff ID enables users to securely, quickly and
       seamlessly log in to various services across the Russian Internet
       without entering a login or password.
     • In August, Tinkoff launched Tinkoff Neuro Shield, a security platform
       for Tinkoff Bank and Tinkoff Mobile customers, providing the highest
       possible protection on the market against fraud and spam. This is the
       first time in Russia that security tools from a bank (banking
       algorithms for protection against social engineering) and a telecoms
       operator have been integrated into a single platform.

    

    

   For enquiries:
   Tinkoff PR Department Tinkoff IR Department
    1 pr@tinkoff.ru
                          2 ir@tinkoff.ru
    
                          

   About TCS Group

    

   TCS Group is an innovative provider of digital financial and lifestyle
   services. Branchless since its inception in 2006, TCS developed a full
   range of in-house proprietary technology solutions and services, including
   digital banking, brokerage, acquiring and other merchant solutions,
   insurance, SME banking and much more. 

    

   UK MAR

   This announcement is released by TCS Group Holding plc and contains inside
   information for the purposes of Article 7 of the Market Abuse Regulation
   (EU) 596/2014 as it forms part of domestic law by virtue of the European
   Union (Withdrawal Act) 2018 ("UK MAR"), and is disclosed in accordance
   with the Company's obligations under Article 17 of UK MAR.
    

   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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   ISIN:          US87238U2033
   Category Code: IR
   TIDM:          TCS
   LEI Code:      549300XQRN9MR54V1W18
   Sequence No.:  183635
   EQS News ID:   1427587


    
   End of Announcement EQS News Service

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References

   Visible links
   1. mailto:pr@tinkoff.ru
   2. mailto:ir@tinkoffgroup.com


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