REG-TCS Group Holding PLC TCS Group Holding PLC releases highlights for 3Q’22 and 9M’22 performance

TCS HoldingAnnouncement

23/11/2022 07:45

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   TCS Group Holding PLC (TCS)
   TCS Group Holding PLC releases highlights for 3Q’22 and 9M’22 performance

   23-Nov-2022 / 10:37 MSK
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   LIMASSOL, CYPRUS —  23 November  2022. THIS  ANNOUNCEMENT CONTAINS  INSIDE
   INFORMATION

   TCS Group Holding PLC releases highlights for 3Q’22 and 9M’22 performance

   LIMASSOL, CYPRUS — 23 November 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 nine months ended 30 September 2022.

   The Tinkoff team continues  to work hard keeping  our customers' needs  in
   our primary  focus,  while  actively adapting  our  existing  products  to
   changing market conditions  and evolving consumer  behaviour. The  Group’s
   diversified and flexible business model has proven through the years to be
   highly adaptable  to  new challenges  and  opportunities. We  continue  to
   actively monitor external environment and customer level data while making
   our  day-to-day  decisions,  and  remain  confident  in  our  ability   to
   successfully navigate changing environment.

   The number of Tinkoff customers continues to grow organically and exceeded
   26 million in 3Q’22. Despite  sector wide earnings headwinds, Tinkoff  has
   been able to deliver a positive financial  result both in 3Q and 9M  2022.
   The Group continues to maintain a significant liquidity cushion and  ample
   capital buffers, which  will enable it  to further adapt  to the  changing
   environment and capture growth opportunities as they arise.

    

   KEY PERFORMANCE METRICS

                                                Y-o-Y     Q-o-Q
   Key metrics, mn            3Q'22 3Q'21 2Q'22
                                                Change, % Change, %
   Total customers             26.3  18.5  24.3       42%        8%
   Active customers            18.3  12.8  17.3       43%        6%
   Monthly active users (MAU)  20.6  13.7  19.5       50%        6%
   Daily active users (DAU)     8.7   4.8   7.5       79%       16%

    

   FINANCIAL AND OPERATING REVIEW

   RUB bn                     3Q’22 3Q’21 ∆    2Q’22 ∆    9M’22 9М’21 ∆
   Interest income             50.9  42.9  19%  52.2  -2% 152.6 118.0  29%
   Interest expense           -13.2  -7.3  82% -21.5 -38% -46.5 -19.0 144%
   Net interest income         36.7  34.8   5%  29.7  24% 103.1  97.1   6%
   Fee and commission income   27.8  22.4  24%  32.2 -14%  96.2  58.5  64%
   Fee and commission expense  -9.1 -10.3 -12%  -8.7   5% -31.7 -27.2  17%
   Net fee and commission
                               18.7  12.1  54%  23.5 -21%  64.5  31.3 106%
   Income
   Total operating expenses   -34.1 -25.8  32% -31.9   7% -97.3 -70.2  39%
   Profit before tax            9.1  20.7 -56%   4.2 115%  15.1  59.1 -74%
   Profit for the period        5.9  16.5 -64%   3.0  96%  10.1  46.8 -78%

    

    

    

   Balance Sheet,
                      30.09.2022 30.06.2022 ∆   31.12.2021 ∆   30.09.2021 ∆
   RUB bn
   Loans and advances
   to                        584        584  0%        606 -4%        556  5%

   customers*
   Customer accounts         961        983 -2%        946  2%        777 24%

   *Net portfolio

    

   Our total customer base continued to grow steadily and reached 26.3 mn  in
   3Q’22. Once again it underscores  the attractiveness of our daily  banking
   and lifestyle ecosystem and lays the foundation for further cross-sell  of
   our expanding products (including credit  ones) in line with our  customer
   acquisition strategy.

    

   In 3Q’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 19%  year-on-year to  RUB 50.9  bn in  3Q’22
   (3Q’21: RUB 42.9  bn), driven  by the higher  base of  our loan  portfolio
   helped by 2021 expansion, 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 3Q’22, interest expense rose by 82% year-on-year to RUB 13.2 bn (3Q’21:
   RUB 7.3 bn), driven by a marked  increase in our cost of borrowing,  owing
   to the monetary  policy environment, as  well as an  expanded base of  the
   customer funds.

    

   In 3Q’22, net interest  margin experienced a  low single-digit decline  in
   percentage points terms year-on-year,  primarily driven by higher  funding
   costs and more liquid composition of the balance sheet.

    

   Fee and commission income increased by  24%% year-on-year in 3Q’22 to  RUB
   27.8bn (3Q’21: RUB 22.4bn),  supported mainly by  the continued growth  of
   our retail  and  SME  banking  businesses.  At  the  same  time,  fee  and
   commission expense declined  by 12% year-on-year  in 3Q’22 to  RUB 9.1  bn
   (3Q’21: RUB 10.3 bn) due to lower payment systems costs.

    

   Cost  of  risk  increased  materially  year-on-year  in  9M’22  owing   to
   conservative macro-related  provisioning and  was close  to our  long-term
   average level of around 10%.

    

   In 3Q’22, our total operating expenses increased 32% y-o-y to RUB 34.1  bn
   (3Q’21: RUB 25.8 bn) driven by our continued investment into our IT talent
   and capability to support our growing product range and customer base. Our
   customer acquisition expenses were broadly stable despite growing customer
   base as we significantly rationalised our marketing and advertising spend.

    

   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  remained profitable  in 9M22  with net  profit of  RUB 10.1  bn
   (9M’21: RUB 46.8 bn). In 3Q’22 our  net profit was RUB 5.9 bn (3Q’21:  RUB
   16.5 bn), decreasing  64% year-on-year,  primarily impacted  by growth  in
   funding costs and conservative provisioning.

    

   In 3Q’22, the Group maintained a  healthy balance sheet with stable  total
   assets compared to the end of 2021.

    

   In 3Q’22, the net loan book decreased by 4% YTD to RUB 584 bn (31  Dec’21:
   RUB 606 bn). The Group’s customer accounts increased by 2% YTD to RUB  961
   bn (31 Dec’21: RUB 946 bn).

    

   The Group’s capital position  remained strong, with  Basel III CET1  ratio
   being stable year-on-year.  In 3Q’22, all  statutory capital  requirements
   were met with healthy buffers.

    

   The Group aims to continue to honor its obligations to bondholders subject
   to regulatory constraints.

    

   3Q’2022 REPORTING PERIOD OPERATING HIGHLIGHTS

    

     • The Group had over 21.9 mn total Tinkoff Black customers as of 1
       October 2022.

    

     • In July, Tinkoff launched universal  Tinkoff ID. The service  provides
       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 July, Tinkoff Capital launched  a closed-end fund for investing  in
       residential real estate at the stage of commencement of  construction,
       with  the  aim  of  selling   the  properties  on  once  they   become
       operational.

    

     • 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.

    

     • In September, Tinkoff began  offering deposits denominated in  Chinese
       yuan.

    

    

    

    

    

    

    

   For enquiries:

   Tinkoff PR Department

    1 pr@tinkoff.ru

    

   Tinkoff IR Department

    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 forwardlooking  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: QRT
   TIDM:          TCS
   Sequence No.:  202567
   EQS News ID:   1494183


    
   End of Announcement EQS News Service

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References

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


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