REG-TCS Group Holding PLC TCS Group Holding PLC reports IFRS results for Q4 and FY 2021

TCS HoldingAnnouncement

04/03/2022 07:15

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   TCS Group Holding PLC (TCS)
   TCS Group Holding PLC reports IFRS results for Q4 and FY 2021

   04-March-2022 / 10:00 MSK
   Dissemination of a Regulatory Announcement that contains inside
   information according to REGULATION (EU) No 596/2014 (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 reports IFRS results for Q4 and FY 2021

    

     • Total revenues grew 40% to RUB 273.9bn in FY'21 (FY'20: RUB 195.8bn)
     • Net profit rose 43% to record RUB 63.4bn in FY'21 (FY'20: RUB 44.2bn)
     • Non-credit business lines amounted to 46% of revenues and 26% of
       profit before tax
     • Total customers reached 20.8mn in FY'21 (FY'20: 13.3mn)
     • ROE rose to 42.5% in FY'21 (FY'20: 40.6%)

    

   LIMASSOL, CYPRUS - 4 March 2022. TCS Group Holding PLC (LI: TCS, MOEX:
   TCSG) ("TCS", "We", the "Group", the "Company"), a leading provider of
   financial and lifestyle services via its digital ecosystem, today
   announces its consolidated IFRS results for the three months and twelve
   months ended 31 December 2021.

   Oliver Hughes and Pavel Fedorov, Co-CEOs of TCS Group, commented:

   "While we are reporting strong results for 2021, our immediate focus now
   lies in making sure all our systems work as usual. We have all hands on
   deck and are responding accordingly. Tinkoff is a diversified and
   profitable business with a resilient and scalable business model. Our
   strong performance in 2021 will help us to navigate the year 2022, as we
   work hard to serve our customers, who have always been at the heart of
   what we do at Tinkoff.

   We have ample ruble and FX liquidity and a solid capital position. We are
   monitoring the operational performance of our business on a
   minute-by-minute basis and have all key systems in place to ensure the
   security, protection, and flow of our customers' funds and assets."

    

   FINANCIAL AND OPERATING REVIEW

   RUB bn                         4Q'21 4Q'20 Change    FY'21 FY'20 Change
   Credit accounts acquired (mn   1.9   1.5   31%       7.0   4.3   62%
   pcs)
   Net margin                     35.4  27.1  +30.5%    132.6 104.7 +26.6%
   Net margin after provisions    28.5  21.7  +31.3%    110.9 65.4  +69.6%
   Profit before tax              21.9  15.6  +40.5%    81.0  56.2  +44.1%
   Net profit                     16.6  12.3  +34.6%    63.4  44.2  +43.3%
   Return on equity               39.2% 40.5% -1.3 p.p. 42.5% 40.6% +1.9 p.p.
   Net interest margin            13.7% 16.1% -2.4 p.p. 15.1% 17.8% -2.7 p.p.
   Cost of risk                   4.9%  5.7%  -0.8 p.p. 4.5%  10.0% -5.5 p.p.

   RUB bn                              31 Dec 2021 31 Dec 2020 Change
   Total assets                        1,318       859         +53.4%
   Net loans and advances to customers 606         376         +61.0%
   Share of NPLs                       8.6%        10.4%       -1.8 p.p
   Cash and treasury portfolio         538         375         +43.4%
   Total liabilities                   1,142       732         +55.9%
   Customer accounts                   946         627         +50.9%
   Total equity                        176         127         +38.6%
   Tier 1 capital ratio                20.2%       17.9%       +2.3 p.p.
   Total capital ratio                 20.2%       17.9%       +2.3 p.p.
   CBR N1.0 (capital adequacy ratio)   15.3%       13.1%       +2.2 p.p.

    

   In 4Q'21, the Group's total revenue grew by 51% year-on-year to RUB 80.4
   bn (4Q'20: RUB 53.1 bn). Gross interest income increased by 40%
   year-on-year to RUB 45.8 bn (4Q'20: RUB 32.8 bn), driven primarily by loan
   portfolio growth.

    

   Gross yield decreased to 27.8% in 4Q'21 (4Q'20: 30.4%), mainly as a result
   of changes in the loan mix. The interest yield on the Group's securities
   portfolio increased to 5.9% (4Q'20: 5.0%), in connection with rising
   rouble interest rates.

    

   In 4Q'21, interest expense increased by 83% year-on-year to RUB 9.5 bn
   (4Q'20: RUB 5.2 bn) as a result of the significant expansion of our
   customer base. The Group's cost of borrowing increased from 3.3% in 4Q'20
   to 4.0% in 4Q'21, following increase of market rates.

    

   In 4Q'21 net margin grew by 31% year-on-year to RUB 35.4 bn (4Q'20: RUB
   27.1 bn), primarily as a result of our growing loan portfolio.

    

   Cost of risk fell to 4.9% 4Q'21 from 5.7% in 4Q'20. Our risk-adjusted net
   interest margin decreased from 13.1% in 3Q'21 to 11.0% on 4Q'21 (4Q'20:
   12.9%).

    

   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. In
   4Q'21 non-credit revenue represented 46% of the Group's revenue and 26% of
   the Group's profit before tax. 

    

   At the end of 4Q'21, the Group had:

     • over 14.6 mn total current account customers with a total balance of
       RUB 545 bn across all accounts
     • over 671k total SME customers, with a total current account balance of
       RUB 144 bn
     • over 3.0 mn total Tinkoff Investments customers

    

   In 4Q'21, operating expenses increased 72% year-on-year to RUB 33.0 bn
   (4Q'20: RUB 19.2 bn) driven by resumed growth of our loan portfolio, and
   investments into our growing new business lines.

    

   The Group reported robust quarterly net profit of RUB 16.6 bn in 4Q'21
   (4Q'20: RUB 12.3 bn), supported by continued customer acquisition and
   monetisation. As a result, ROE for 4Q'21 stood at 39.2% (4Q'20: 40.5%).

    

   In 4Q'21, the Group continued to maintain a healthy balance sheet, with
   total assets growing by 53.3% since the end of 2020 to RUB 1,318 bn (31
   Dec'20: RUB 859 bn).

    

   The Group's gross loan book grew by 52.9% since the end of 2020 to RUB 684
   bn (31 Dec'20: RUB 447 bn), while the net loan book increased by 61.0% to
   RUB 606 bn (31 Dec'20: RUB 377 bn).

    

   The Group's NPL ratio fell to 8.6% (31 Dec'20: 10.3%), while our credit
   loss allowance coverage stood at 1.3x non-performing loans.

    

   The Group's customer accounts increased by 50.9% since the end of 2020 to
   RUB 946 bn (31 Dec'20: RUB 627 bn).

    

   The Group's total equity over 2021 rose by 38.6% to RUB 176 bn at the end
   of FY'21 (31 Dec'20: RUB 127 bn) on the back of solid net profit. As of 1
   January 2022 the Group's statutory N1.0 ratio amounted to 15.3%, its N1.2
   ratio stood at 14.0%, and the N1.1 ratio stood at 9.5%.

    

   Possible bond buybacks

    

   The Group may, at any time and from time to time, purchase its outstanding
   debt in open-market purchases, privately negotiated transactions or
   otherwise. Such repurchases, if any, will be upon such terms and at such
   prices as we may determine, and will depend on prevailing market
   conditions, our liquidity requirements, contractual restrictions and other
   factors.

    

   4Q'2021 OPERATING HIGHLIGHTS

    

   Customer base and engagement

     • The Group had over 14.6 mn total Tinkoff Black customers as of 1
       January 2022. 
     • As of 1 January 2022, Group MAU stood at 15.4 mn, Group DAU stood
       at 5.8 mn. 
     • Tinkoff super app was named the fastest growing financial app in
       Russia by the analytics platform App Annie in 2021. The researchers
       estimated that the number of downloads of the Tinkoff mobile app in
       Russia across iOS and Google Play grew by 41% in total in 2021. 

    

   Superior and innovative product offering

     • In November, Tinkoff acquired a controlling stake (51%) in Just Look,
       the developer of Jump. Finance, a fintech service that automates
       interactions with freelancers, including payments. It adds value to
       Tinkoff Business' set of industry solutions for businesses and
       entrepreneurs.  
     • In November, Tinkoff Capital Management Company launched Tinkoff
       Eurobonds EUR, a new exchange-traded mutual fund investing in
       sovereign and corporate Eurobonds denominated in euros, as well as new
       exchange-traded funds (ETFs) for investments in artificial
       intelligence, fintech and Asian markets. 
     • In December, Tinkoff carried out a major upgrade of its mobile super
       app, adding account sharing options, innovative tech features and
       COVID-19 related services. 
     • In December, Tinkoff launched Investment Academy, a country-wide
       educational initiative aimed at strengthening financial literacy among
       the population.  
     • In December, Tinkoff Investments became the first broker in Russia to
       offer securities trading on weekends.  
     • Tinkoff Cashier launched a new solution allowing customers to quickly
       get an installment plan in just a few clicks while shopping at online
       stores. This was made possible thanks to Tinkoff Cashier's integration
       of Tinkoff Credit Broker installment service into the payment form.

    

   Market and industry associations recognised Tinkoff's strong performance 

     • In November, Tinkoff Business took home awards in two categories -
       Best Digital Bank for Small Business Lending and Best Customer Journey
       in Small Business Lending - at the Frank Small Business Loans Award
       2021 organized by Frank RG.  
     • In December, Tinkoff was named Bank of the Year in Russia at the Bank
       of the Year Awards 2021, organized by The Banker, a leading
       international finance publication which is part of the Financial Times
       Group. The Banker recognised Tinkoff for its strong financial
       performance in 2020. 

    

    ESG developments 

     • In November, Tinkoff became the first Russian financial institution to
       join the Science Based Targets initiative (SBTi), a global body
       enabling businesses to set ambitious science-based emissions reduction
       targets in line with the latest climate science. It is focused on
       accelerating companies and financial institutions across the world to
       halve emissions before 2030 and achieve net-zero emissions before
       2050. 
     • In November, Tinkoff analysed and published its greenhouse emissions
       gas inventory on the website for the entire value chain for 2019 and
       2020 baseline years, making us, to our knowledge, one of the first
       fintechs in the world to do so. Total carbon footprint of the Group is
       significantly lower than traditional financial institutions and IT
       companies generally show.

    

   LSE Russia related update; Rule 1510

   On 3 March 2022, the London Stock Exchange suspended the admission to
   trading of a number of instruments, including TCSGH GDRs, in accordance
   with Rule 1510 of the Rules of the London Stock Exchange, with immediate
   effect, to maintain orderly markets. The Exchange will continue to keep
   this situation under review.

   CONFERENCE CALL INFORMATION

   TCS management team will host an investor and analyst conference call at
   2:00 pm UK time (5:00 pm Moscow time, 09:00 am U.S. Eastern Standard
   Time), on Friday, 4 March 2022.

   The press release, presentation and financial statements will be available
   on the Tinkoff website at
    1 https://www.tinkoff.ru/eng/ir/financials/quarterly-earnings/

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

                            5672836
   Conference ID
                             
    
                             
   Russian Federation       +7 495 646 5137

   Toll-free                8 10 8002 8655011
   United Kingdom           +44 (0)330 336 9601

   Toll-free                0800 279 6877
   United States of America +1 323-701-0160

   Toll-free                800-289-0720

    

   A live webcast of the presentation will be available at:

    2 https://www.webcast-eqs.com/tcsgroup20220310

    

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

    

   For enquiries:
   Tinkoff PR Department          Tinkoff IR Department
   Artem Lebedev
   + 7 495 648-10-00 (ext. 2202)  Larisa Chernysheva
   Alexandr Leonov                + 7 495 648-10-00 (ext. 2312)
   + 7 495 648-10-00 (ext. 35738)
    3 pr@tinkoff.ru               Andrey Pavlov-Rusinov
                                  + 7 495 648-10-00 (ext. 31010)
    
                                   4 ir@tinkoff.ru
    

   About TCS Group

    

   TCS Group is an innovative provider of digital financial and lifestyle
   services to more than 20 million customers via its award-winning apps and
   web interface. Branchless since its inception in 2006, the Tinkoff
   ecosystem currently offers a full range of services, including digital
   banking, brokerage, acquiring and other merchant solutions, insurance,
   corporate banking for businesses of all sizes and much more. 

    

   Tinkoff Bank, 100% owned by TCS Group, one of the most profitable digital
   banks globally, is a central part of this ecosystem and the first
   financial institution in Europe to launch its own super app. Aided by
   artificial intelligence (AI) and machine learning, it enables customers to
   assess and plan personal spending, invest savings, earn loyalty program
   bonuses, book trips, buy movie tickets, make restaurant reservations, and
   perform other tasks all in one place.   

    

   Global Finance named Tinkoff Bank the world's Best Consumer Digital Bank
   in 2020 and 2018. It was also named the Best European Retail Bank of the
   Year by Retail Banker International in 2020. The bank's mobile app has
   been consistently praised by local and global independent experts as the
   best of its kind (in 2013, 2014, 2015, 2016 by Deloitte and in 2018 by
   Global Finance). 

    

    

    

    

    

   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: FR
   TIDM:          TCS
   LEI Code:      549300XQRN9MR54V1W18
   Sequence No.:  146815
   EQS News ID:   1294353


    
   End of Announcement EQS News Service

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References

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