REG-TCS Group Holding PLC TCS Group Holding PLC reports record profit for the period (net profit) in 2Q'21 and 1H'21, raises FY'21 guidance and extends buyback programme
26/08/2021 08:05
============
TCS Group Holding PLC (TCS)
TCS Group Holding PLC reports record profit for the period (net profit) in
2Q'21 and 1H'21, raises FY'21 guidance and extends buyback programme
26-Aug-2021 / 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.
══════════════════════════════════════════════════════════════════════════
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
TCS Group Holding PLC reports record profit for the period (net profit) in
2Q'21 and 1H'21, raises FY'21 guidance and extends buyback programme
• Total customers reached 16.7m in 2Q'21 (2Q'20: 11.2m)
• Total revenues grew 37% to RUB 65.0 bn in 2Q'21 (2Q'20: RUB 47.4 bn)
• Non-credit business lines reached 44% of revenues
• Net profit rose 57% to RUB 16.1 bn in 2Q'21 (2Q'20: RUB 10.2 bn)
• ROE reached 46.1% in 2Q'21 (2Q'20: 40.0%)
LIMASSOL, CYPRUS - 26 August 2021. 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 its consolidated IFRS results for the three months and six
months ended 30 June 2021.
Oliver Hughes, CEO of Tinkoff Group, commented:
"We had another strong quarter and we are proud to report that Tinkoff is
now serving more than 16.7 total customers and is continuing to grow
rapidly. We showed excellent performance across just about all of our
business-lines and cross-sell is clearly becoming a major driver of our
business as we unlock the power of our ecosystem.
We continue delivering profitable growth with net profit rising 57%
year-on-year to a new quarterly record of RUB 16.1 bn. ROE climbed to
46.1% in the period, underpinned by well-diversified revenue streams.
During 2Q we enhanced our partnership network by acquiring a 5% stake in
SPB Exchange, an important partner for Tinkoff Investments. Also, we
bought a controlling stake in the loyalty app Koshelek, which has
substantial synergies with our core business and a market-leading position
with 11 million monthly active users of the app. We believe that there is
significant scope for further partnerships and bolt-on acquisitions as we
search for businesses that have strong fit with our ecosystem, in
particular, in the areas of brokerage, payments and SME. In line with
this logic, we also launched a new Service Partner Program, aimed at
seeking out top start-ups and technology projects. As part of this
program, Tinkoff Group aims to become a strategic partner to companies
that show stable growth and have the potential to be integrated into the
business-lines of the Tinkoff ecosystem.
As previously communicated, the Company is currently engaging with
regulators to explore licensing options and market entry strategies in a
number of key markets in South and Southeast Asia. We plan to provide the
market with an update on this important component of Company's strategy in
Q4 2021.
Finally, we plan to announce the second wave of TCSGH Board expansion in
the coming weeks to further enhance our corporate governance. Please look
out for the announcement."
Stanislav Bliznyuk, Chairman of the Tinkoff Bank Management Board, added:
"I'm pleased to highlight that our non-credit revenue continued rising
steadily and accounted for 44% of total revenue in Q2 2021.
During the second quarter, we surpassed 100,000 daily deliveries of our
Tinkoff Black products, the backbone of our ecosystem, setting a new daily
record for us. Tinkoff Black now boasts 10.6 million total customers as of
the end of June. At the same time, our Tinkoff Pro subscription service is
taking off, with over 750k customer accounts activated only 8 months from
its launch, which demonstrates a new level of engagement by our core
client base.
In 2Q, we also launched our BNPL business - which is one of the more
existing and faster-growing segments globally. Our Dolyame offering
became Russia's first digital BNPL (buy-now-pay-later). The new platform
facilitates combines the advantages of online acquiring and installment
plans. Buyers can pay for goods in installments without incurring
interest, and sellers can immediately receive the full purchase price
in their account without delays. We believe this has tremendous market
potential.
Tinkoff Investments, Russia's leading brokerage by active customer base,
expanded to serve 2.3 million total customers by the end of 1H 2021. Most
recently, Tinkoff Investments has appointed Ilya Oprenko as Head of
Private Banking to lead this new offering at Tinkoff. He will focus on
developing our advisory and lifestyle offerings, as well as Private Equity
and alternative investments not previously available to Tinkoff
Investments customers.
In July, we completed our debut securitisation transaction, which involved
an offering of mortgage-backed securities. Going forward, securitisation
will be an important mechanism at our disposal to balance capital
requirements and manage liquidity.
Tinkoff Acquiring is capturing market share, reaching approximately 15% of
Russian ecommerce acquiring in the first half of 2021 and securing our
place as one of the top three Russian banks in this segment. We are
confident that the rapid growth of Russian ecommerce will present us with
many opportunities to further expand this business line.
Tinkoff Business continued growing its customer base, with particularly
strong performance in the medium-sized business segment. The SME business
line reached 547 thousand total customers at the end of the second
quarter.
Our efforts have not gone unnoticed. Tinkoff has been named Central and
Eastern Europe's Best Digital Bank of 2021 by Euromoney's Awards for
Excellence, one of several important accolades we received this year."
FINANCIAL AND OPERATING REVIEW
RUB bn 2Q'21 2Q'20 Change 1H'21 1H'20 Change
Net margin 33.1 26.8 +23% 62.3 52.4 +19%
Net margin after provisions 28.4 14.6 +94% 52.8 24.7 +114%
Profit before tax 20.4 13.1 +55% 38.4 24.8 +55%
Net profit 16.1 10.2 +57% 30.3 19.3 +57%
Return on equity 46.1% 40.0% +6.1 p.p. 44.7% 38.4% +6.3 p.p.
Net interest margin 16.6% 19.5% -2.9 p.p. 16.1% 19.7% -3.6 p.p.
Cost of risk 4.5% 12.5% -8.0 p.p. 4.5% 14.3% -9.8 p.p.
RUB bn 30 Jun 2021 31 Dec 2020 Change
Total assets 966 859 +12%
Net loans and advances to customers 507 377 +35%
Share of NPLs 8.7% 10.3% -1.6 p.p.
Cash and treasury portfolio 337 375 -10%
Total liabilities 819 732 +12%
Customer accounts 707 627 +13%
Total equity 147 127 +16%
Tier 1 capital ratio 18.1% 17.9% +0.2pp
Total capital ratio 18.1% 17.9% +0.2pp
CBR N1.0 (capital adequacy ratio) 12.2% 13.1% -0.9pp
In 2Q'21, the Group's total revenue grew by 37% y-o-y to RUB 65.0 bn
(2Q'20: RUB 47.4 bn). Gross interest income increased by 22% y-o-y to RUB
39.9 bn (2Q'20: RUB 32.7 bn), driven by the continued growth of our loan
portfolio, customer base, and credit product range.
Gross interest yield decreased y-o-y to 25.6% in 2Q'21 (2Q'20: 29.8%),
mainly as a result of the declining interest rate environment and changes
in the loan mix. The interest yield on the Group's securities portfolio
increased slightly to 5.5% (2Q'20: 5.4%).
In 2Q'21, in connection with the increase in our funding base as we
continued to grow our customer base and account balances, interest expense
rose only by 11% y-o-y to RUB 6.2 bn (2Q'20: RUB 5.6 bn). This was driven
by a continued decline in our cost of borrowing from 4.5% in 2Q'20 to 3.4%
in 2Q'21, due to a gradual decrease in deposit rates (consistent with
market rate decreases) and a growing share of current accounts in the
funding mix.
In 2Q'21, net margin grew by 23% y-o-y to RUB 33.1 bn (2Q'20: RUB 26.8
bn), primarily as a result of solid y-o-y net loan portfolio growth.
Cost of risk fell to 4.5% in 2Q'21 from 12.5% in 2Q'20. Our risk-adjusted
net interest margin rose from 13.3% in 1Q'21 to 14.2% in 2Q'21 (2Q'20:
10.6%).
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
2Q'21 non-credit revenue represented 44% of the Group's revenue and 18% of
the Group's profit before tax.
At the end of 2Q'21, the Group had:
• 10.6 mn total retail current account customers with a total balance of
RUB 375 bn
• over 547k total SME customers, with a total balance of RUB 93 bn
• over 2.3 mn total Tinkoff Investments customers and over RUB 500 bn in
customer assets under custody
In 2Q'21, operating expenses increased 90% y-o-y to RUB 24.1 bn (2Q'20:
RUB 12.7 bn) driven by continued investment in marketing and advertising
for our new, growing business lines.
The Group reported robust quarterly net profit of RUB 16.1 bn in 2Q'21
(2Q'20: RUB 10.2 bn), supported by new customer acquisition and
monetisation. As a result, ROE for 2Q'21 stood at 46.1% (2Q'20: 40.0%).
In 2Q'21, the Group continued to maintain a healthy balance sheet with
total assets growing by 12% since the end of 2020 to RUB 966 bn (31
Dec'20: RUB 859 bn).
The Group's gross loan book grew by 30% since the end of 2020 to RUB 580
bn (31 Dec'20: RUB 447 bn), while the net loan book increased by 35% to
RUB 507 bn (31 Dec'20: RUB 377 bn).
The Group's NPL ratio decreased to 8.7% (31 Dec'20: 10.3%), while our loan
loss provision coverage stood at 1.44x non-performing loans.
The Group's customer accounts increased by 13% since the end of 2020 to
RUB 707 bn (31 Dec'20: RUB 627 bn).
Tinkoff's total equity rose by 16% to RUB 147 bn at the end of 2Q'21 (31
Dec'20: RUB 127 bn). As of 1 July 2021, the Group's statutory N1.0 ratio
stood at 12.2%, its N1.2 ratio stood at 11.9%, and the N1.1 ratio stood at
10.0%.
upgraded GUIDANCE FOR FY'21
While some uncertainty remains, we believe we have enough visibility
to upgrade our guidance for the financial year of 2021 under the
assumption of a gradual recovery in economic activity:
• We now expect our net loan portfolio growth to be 50+% (was previously
more than 30%)
• We expect cost of risk to be in the 5% area (was previously 7-8%)
• We expect cost of borrowing to be 3-4% (unchanged)
• We expect the share of non-credit revenues to be more than 40%
(unchanged)
• We expect net profit to be at least RUB 60 bn (was previously RUB 55
bn)
EXTENSION OF THE BUYBACK PROGRAMME TO 2022
The Board approved an extension to the current GDRs buyback programme
launched April 2021 expiring 31 August 2021 of up to an additional 1.05M
GDRs (programme aggregate 1.5M, of which approximately 450K have been
purchased) in the period to 30 June 2022, up to a maximum programme
expenditure of USD125M (conditional upon the approval of the shareholders
for the period after the 2021 AGM). The purpose of the Programme remains
to fund the Company's long-term management incentive plan MLTIP, as
notified in earlier disclosures in April 2021. The GDRs repurchased by the
Company will be held in treasury pending cancellation or other permitted
use.
The Programme will be conducted consistent with the general authority to
repurchase shares/GDRs granted by the Company's shareholders at the 2020
annual general meeting, and otherwise in accordance with applicable laws
and regulations. Details of any purchases made under the Programme will be
provided via RNS announcements and published on the Company's website.
2Q'2021 AND POST-REPORTING PERIOD OPERATING HIGHLIGHTS
Customer base and engagement growth has led to increased market share
• The Group had over 10.6 mn total Tinkoff Black customers as of 1 July
2021.
• As of 1 July 2021, Group MAU stood at 12.5 mn, Group DAU stood at 4.2
mn.
• Tinkoff Bank's credit card market share increased to 14,6% as of 1
July 2021, further solidifying its position as Russia's second largest
credit card issuer.
The market and industry associations recognised Tinkoff's strong
performance
• In May, Tinkoff Mobile was named Russia's most innovative mobile
operator in a survey conducted by TelecomDaily - a leading Russian
media covering telecom market.
• In July, Voice assistant Oleg won in two categories in Chatbot Rank
2021 ranking organised by Markswebb, scoring the first place both in
the Best Customer Experience in Chats ranking out of all digital
companies and in the Quality of Customer Experience in Chats ranking
among Russia's top 15 banks.
• In July, Tinkoff was named Central and Eastern Europe's Best Digital
Bank at Euromoney's Awards for Excellence 2021. In this category,
Euromoney looked for true leadership in a bank's digital offering as
well as evidence that the company's technology benefits not only the
efficiency of the institution, but also customers themselves.
• In July, Tinkoff received Quality Recognition Awards by J.P. Morgan in
three categories, in recognition of its operational excellence in
processing customer payments in foreign currencies in 2020.
• In July, Tinkoff won four out of seven CEMEA categories in the 2020
Visa Global Service Quality Awards - an annual client performance
program honoring the world's highest-performing acquirers, issuers,
and issuer processors.
• In July, Frank Cards & Reward named Tinkoff's Superapp the best daily
mobile banking app among its 2021 awards recipients.
• In August, Brand Finance Magazine announced its 2021 Brand Finance
Russia 50 rating, in which Tinkoff rose by 7 spots to 32nd place, in
addition to being included in the top 5 most valuable banks in Russia.
Superior and innovative product offering combined with targeted marketing
activities secure Tinkoff's place as a leading fintech brand
• In April, Tinkoff acquired a majority stake in Beskontakt LLC, the
developer of Koshelek digital wallet, an aggregator of banking cards
and retail loyalty programs. The Koshelek app is a leader in its
field, reporting the highest number of users of any app in Russia and
the CIS
• In June, Tinkoff launched a beta version of its free voice assistant
Oleg which became available to subscribers of all Russian mobile
operators. Oleg is not just a personal assistant but also a "defender"
protecting customers from spammers and fraudsters.
• In June, Tinkoff launched a new program to assist startups and
technology projects, as part of which it will become a strategic
investor or partner to companies that show stable growth and have the
potential to be integrated into Tinkoff's services, product lines or
its wider ecosystem.
• In June, Tinkoff adopted AI technology developed by Anodot - the
autonomous business monitoring company - to help safe-proof the way
customers experience payments and trading on the Tinkoff platform.
• In July, Tinkoff's voice assistant Oleg was a winner in the Increase
in Productivity category and a finalist in the Cost Reduction category
of the first national award AI Russia Awards'21 - the first national
award in the field of effective use of artificial intelligence for
business.
• In August, Tinkoff and Yandex announced a partnership through which
Tinkoff will offer online loans of up to RUB 200k to customers on the
Yandex.Market ecommerce platform.
Commitment to further improving our Investor Relations (IR) disclosure and
ESG practices
• Tinkoff's senior management will continue its series of virtual
Strategy Days for analysts and investors throughout the second half of
the year, where they will present detailed information on Tinkoff's
business lines and exciting new strategic initiatives.
Corporate governance enhancements and new management appointments
• In July, Ilya Oprenko was appointed Head of Private Banking where he
will oversee the launch of Tinkoff Private and be responsible for
growing the segment's assets and managing private banking teams. He
will focus on developing our advisory and lifestyle offerings, as well
as Private Equity and alternative investments not previously available
to Tinkoff Investments customers.
• In July, Ivan Zimin was appointed Vice President for Integration of
Government Technologies and Services, in order to develop Tinkoff's
presences and partnerships with the Russian Government's fintech and
digital services.
Other corporate developments
• In June, Tinkoff acquired 5% in the St. Petersburg Exchange - a major
platform for trading international securities in Russia.
• In July, Tinkoff completed its debut mortgage securitisation, placed
by mortgage agent TB 1. The placement included class A and class B
bonds secured by a mortgage loan portfolio. The order book was 1.5x
oversubscribed.
• In July, Tinkoff announced it would open 9 new development hubs across
Russia and Belarus. The company intends to hire 800 employees to staff
the development hubs by the end of the year.
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.
CONFERENCE CALL INFORMATION
The Tinkoff management team will host an investor and analyst conference
call at 14:00 UK time (16:00 Moscow time, 09:00 US Eastern Daylight Time),
on Thursday, 26 August 2021.
The press release, presentation and financial statements will be available
on the Tinkoff website
at 1 https://tinkoffgroup.com/financials/quarterly-earnings/
To participate in the conference call, please use the following access
details:
8259392
Conference ID
Russian Federation +7 495 646 9190
Toll-free 8 10 800 2867 5011
United Kingdom +44 (0) 330 336 9434
Toll-free 0800 279 7209
+1 323-794-2588
United States of America
888-394-8218
Toll-free
A live webcast of the presentation will be available at:
2 https://www.webcast-eqs.com/tcsgroup20210826
Please register approximately 10 minutes prior to the start of the call.
For enquiries:
Tinkoff IR Department
Tinkoff PR Department
Artem Lebedev Larisa Chernysheva
+ 7 495 648-10-00 (ext. 2202) + 7 495 648-10-00 (ext. 2312)
Alexandr Leonov
+ 7 495 648-10-00 (ext. 35738) Andrey Pavlov-Rusinov
3 pr@tinkoff.ru + 7 495 648-10-00 (ext. 31010)
4 ir@tinkoffgroup.com
About Tinkoff Group
TCS Group Holding PLC is an innovative provider of online retail and SME
financial services. It includes Tinkoff Bank, its mobile virtual network
operator Tinkoff Mobile, Tinkoff Insurance, its asset management company
Tinkoff Capital, Tinkoff Software DC, a network of development hubs in
major Russian cities, and Tinkoff Education. The Group is currently
developing Tinkoff ecosystem, which offers financial and lifestyle
services.
The Group was founded in 2006 by Russian entrepreneur Oleg Tinkov and has
been listed on the London Stock Exchange since October 2013.
The Group's key business is Tinkoff Bank, a fully online bank that serves
over 16 mn customers and forms the core of the Tinkoff ecosystem. Tinkoff
is the 3rd largest retail bank in Russia in terms of active client-base.
Tinkoff Bank is the second largest player in the Russian credit card
market, with a share of 14.3%. The 2Q'21 IFRS net profit of TCS Group
Holding PLC amounted to RUB 16.1 bn. The ROE was 46.1%.
With no branches, the Group serves all its customers remotely via online
channels and a cloud-based call centre. The centre is staffed by over
10,000 employees, making it one of the largest in Europe. To ensure smooth
delivery of the Group's products, the Group has a nationwide network of
over 10,000 representatives.
Global Finance named Tinkoff Bank the world's Best Consumer Digital Bank
in 2020 and 2018, and the Best Consumer Digital Bank in Russia in 2020,
2019, 2018, 2016 and 2015. Tinkoff was also named the Best European Retail
Bank of the Year by Retail Banker International in 2020. In 2021, the
Banker recognised Tinkoff Bank as Russia's Best-Performing Bank. 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).
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.
══════════════════════════════════════════════════════════════════════════
ISIN: US87238U2033
Category Code: FR
TIDM: TCS
LEI Code: 549300XQRN9MR54V1W18
Sequence No.: 120791
EQS News ID: 1229024
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
5 fncls.ssp?fn=show_t_gif&application_id=1229024&application_name=news&site_id=refinitiv
References
Visible links
1. https://tinkoffgroup.com/financials/quarterly-earnings/
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=fa826ec5b3afa21be1c0316c211b2f92&application_id=1229024&site_id=refinitiv&application_name=news
2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=32419fc71f68b3a7e27654155d449e65&application_id=1229024&site_id=refinitiv&application_name=news
3. mailto:pr@tinkoff.ru
4. mailto:ir@tinkoffgroup.com
mailto:ir@tinkoffgroup.com
============Recent news on TCS Holding
See all newsREG - Official List TCS Grp Hldg PLC - Removal - TCS Group Holding PLC
AnnouncementREG - Stock Exch Notice TCS Grp Hldg PLC - Cancellation - TCS GROUP HOLDING PLC
AnnouncementREG-TCS Group Holding PLC TCS Group Holding PLC reports IFRS results for 4Q and FY 2022
AnnouncementREG-TCS Group Holding PLC TCS Group Holding PLC: notification of Board changes under LR9.6
AnnouncementREG-TCS Group Holding PLC Correction: TCS Group Holding PLC: Headhunter Group plc Appoints Mr Sergey Arsenyev as Non-Executive Director
Announcement