REG-TCS Group Holding PLC TCS Group Holding PLC Posts Record High Net Income in 4Q and FY2018, Announces 1st 2019 Interim Dividend
12/03/2019 07:05
============
TCS Group Holding PLC (TCS)
TCS Group Holding PLC Posts Record High Net Income in 4Q and FY2018,
Announces 1st 2019 Interim Dividend
12-March-2019 / 10:01 MSK
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
TCS Group Holding PLC Posts Record High Net Income in 4Q and FY2018,
Announces 1st 2019 Interim Dividend
Limassol, Cyprus - 12 March 2019. TCS Group Holding PLC (TCS LI) (the
"Group"), Russia's leading provider of online financial and lifestyle
services via the Tinkoff.ru ecosystem, today announces its consolidated
IFRS results for the fourth quarter and twelve months ended 31 December
2018.
KEY FINANCIAL HIGHLIGHTS
4Q'2018
• Net margin up 24% y-o-y to RUB 16.1 bn (4Q'17: RUB 13.0 bn)
• Profit before tax up 24% y-o-y to RUB 10.5 bn (4Q'17: RUB 8.5 bn)
• Net income up 27% y-o-y to RUB 8.1 bn (4Q'17: RUB 6.4 bn) - a record
quarterly net income for the Group
• ROE increased to 81.2% (4Q'17: 63.1%)
• Net interest margin at 21.8% (4Q'17: 24.5%)
• Cost of risk at 4.2% (4Q'17: 2.7%)
FY 2018
• Net margin grew by 29% y-o-y to RUB 59.2 bn (FY17: RUB 46.1 bn)
• Profit before tax up 41% y-o-y to RUB 35.2 bn (FY17: RUB 25.0 bn)
• Net income up 43% y-o-y to RUB 27.1 bn (FY17: RUB 19.0 bn) - a record
annual net income for the Group
• ROE grew to 74.7% (FY17: 52.8%)
• Net interest margin at 23.2% (FY17: 25.3%)
• Cost of risk at 6.0% (FY17: 5.5%)
All balance sheet numbers and ratios as of 31 December 2018 below are
compared with corresponding numbers and ratios as of 1 January 2018 and
have been compiled in accordance with IFRS 9. All changes shown for
comparative balance sheet numbers and ratios also reflect the adoption of
IFRS 9 from 1 January 2018.
• Total assets increased by 44.8% to RUB 375.5 bn (1 Jan'18: RUB 259.3
bn)
• Gross loans and advances to customers up 40.8% to RUB 234.7 bn (1
Jan'18: RUB 166.7 bn)
• Net loans and advances to customers up 53.0% to RUB 198.5 bn (1
Jan'18: RUB 129.7 bn)
• Share of non-performing loans (NPLs) decreased to 9.4% (1 Jan'18:
13.4%)
• Customer accounts increased by 56.9% to RUB 280.9 bn (1 Jan'18: RUB
179.0 bn)
• Total equity increased by 31.5% to RUB 42.3 bn (1 Jan'18: RUB 32.1 bn)
GUIDANCE FOR 2019
Following strong underlying growth in 2018, the Group is pleased to
announce the following performance guidance for 2019:
* net income of at least RUB 35 bn
* net loan portfolio growth to be around 40%
* cost of risk to be in the range of 6 - 7%
* cost of borrowing to be in the range of 6 - 7%
KEY HIGHLIGHTS FOR 2018
• In 2018 over 2.7 m new active credit customers were acquired,
underpinning net loan growth of 53%
• Tinkoff Bank's credit card market share stood at 11.8% at the end of
2018, strengthening its position as Russia's second largest credit
card issuer
• In April, Tinkoff Bank and NSPK (National Payment Card System)
launched a joint project that enables Tinkoff customers to view card
receipts details in their user accounts
• Following the issue of a professional securities market participant
licence in March, Tinkoff Bank re-launched its Tinkoff Investments
brokerage platform in May, offering customers a breadth of new
capabilities to enable faster and more technologically advanced
securities trading
• In June, Tinkoff piloted home equity loans
• In July, Tinkoff acquired a stake in Kassir.ru, Russia's top online
ticketing provider, in a move to further develop its ecosystem and
offer customers a wider choice lifestyle services through the
Tinkoff.ru platform
• In July, Tinkoff and Sberbank launched joint P2P money transfers using
just a mobile phone number
• In August, Global Finance, the international banking and financial
magazine, recognized Tinkoff Bank as best consumer digital bank in
Russia. In addition, Tinkoff Bank won the following Central and
Eastern Europe nominations: Best Investment Service, Best Digital
Mortgage Service, Best Bill Payment & Presentment, Best Information
Security and Fraud Management, Best in Mobile Banking, and Best Mobile
Banking App
• In September, Tinkoff broadened its lifestyle offering by adding
cinema tickets to its app, and now sells over 230,000 movie tickets
per month
• Following the acquisition of a stake in Kassir.ru, Tinkoff launched
theatre and concert tickets via its app in November
• In September, Tinkoff Bank launched Tinkoff Investments Premium,
offering access to over 10,000 global securities and providing
personal manager services directly in the Investments app
• Tinkoff Investments brought 285,000 new retail investors to the Moscow
Exchange in 2018 which amounts to 40% of a total number of retail
investments customers acquired by MOEX, more than any other brokerage
1 according to the exchange's data
• In October, Tinkoff Bank joined forces with Mail.Ru Group, oneFactor,
MegaFon, Sberbank and Yandex to set up the Big Data Association to set
the stage for promoting big data technology and products in Russia
• In October, the Bank expanded its banking platform for children and
teenagers with the launch of Tinkoff Junior, a mobile app that gives
young customers an easy-to-use and robust tool to manage their
personal finances
• In October, Tinkoff launched nationwide biometric data collection and
became an official vendor for the Unified Biometrics System supplying
voice recognition technology
• In October, Tinkoff Bank extended its multi-currency account offering
to cover 30 currencies
• In November, Tinkoff Bank was named the best consumer digital bank
globally in 2018 by Global Finance's World's Best Digital Bank Awards,
while the Tinkoff mobile banking app was named best in the world among
consumer banks
• In November, Tinkoff become the first Russian bank to open a virtual
development hub, a cloud office bringing together employees from
different locations for banking product development. The virtual hub
works alongside Tinkoff's 10 physical development hubs
KEY HIGHLIGHTS POST 2018
• In February, Tinkoff Bank was in the first wave of Russian banks to
launch the Faster Payments System for its customers. The CBR
introduced FSP to allow nationwide instant P2P payments using mobile
phone numbers
• In February 2019, Tinkoff Bank won four accolades at the Bank of the
Year awards by Banki.ru, Russia's leading banking news portal. Tinkoff
topped the 2018 list in the categories Investment Company of the Year,
Online Mortgage Application, The People's Ranking of banks and The
People's Ranking for mobile operators (Tinkoff Mobile)
• Tinkoff mobile banking app has over 12 mn installs, MAU stands at 3.7
mn (95% growth compared to YE2017), DAU stands at 1.1 mn (120% growth
compared to YE2017).
FIRST 2019 INTERIM DIVIDEND ANNOUNCEMENT
In line with the Group's current dividend policy, the Board of Directors
on 11 March 2019 approved a first interim gross cash dividend for 2019 of
USD 0.32 per share/GDR (with each GDR representing one share), with a
total dividend payment of around USD 58.4 mn.
Subject to London Stock Exchange regulations, indicatively the dividends
will be payable around 25 March 2019, to those shareholders on the Group's
register as at the record date of 22 March 2019. The ex-dividend date will
be 21 March 2019.
According to the terms of the GDR deposit agreement, holders of the
Group's GDRs will receive their dividends within 5 business days of the
payment date.
The Group's new dividend policy announced on 28 December 2018 will take
effect from 1 April 2019.
Oliver Hughes, CEO of Tinkoff Bank, commented:
"I am pleased to report that we've had another excellent year, ending 2018
on a high note. We achieved a new record in net profit for both the fourth
quarter and the full year of RUB 8.1 billion for the quarter and RUB 27.1
billion for the year, beating our guidance.
These strong results were driven by both credit and F&C business lines, as
we continued to expand our financial and lifestyle ecosystem which now
serves well over 8 million customers. In 2018, our non-credit
business-lines generated over 30% of total revenue.
As we press further into non-financial territory, we added cinema, theatre
and concert tickets to our app, which are proving very popular with
customers. Our growing range of non-financial lifestyle services is
translating into greater customer loyalty and engagement. More and more
people are starting to view Tinkoff as a guide and partner for their
lifestyle needs, rather than just a banking app.
As we ramp up Tinkoff Investments, we launched Tinkoff Investments Premium
which offers access to over 10,000 global securities. Overall, Tinkoff
Investments brought more new retail investors to the Moscow Exchange than
any other player in 2018, as we were able to tap into demand from private
individuals, a brand new group of investors for the Russian market.
With the more distant future in mind, we also launched the Tinkoff Junior
app in October, offering banking services to children and teenagers, while
providing their parents with all the requisite controls for their
children's accounts.
Our current accounts for individual customers are continuing to grow
quickly and remain the locomotive for growth of our ecosystem and
lifestyle banking solutions. We opened 1.8 mn new current accounts last
year. This was boosted by the introduction of a multi-currency platform
which allows Tinkoff Black customers to keep their money in 30 currencies.
Our credit business-lines are growing very well. A total of 2.7 m new
credit accounts were opened in 2018 and net loans increased by 53% for the
year, beating our guidance. While credit cards continued to perform
steadily, the share of other credit products - personal loans, POS loans,
car loans and home equity loans - grew to 26.9% of the net loan book by
the end of 2018. At the same time, cost of borrowing decreased from 7.6%
in 2017 to 6.1% in 2018 and our annualised cost of risk was 6.0% in
2018.''
FINANCIAL AND OPERATING REVIEW
RUB bn 4Q'18 4Q'17 Change FY18 FY17 Change
Credits issued ('000 pcs) 1,010 580 74.1% 2,710 2,100 29.0%
Credit card 112.9 80.0 41.1% 372.4 274.6 35.6%
transactions
Net margin 16.1 13.0 +23.6% 59.2 46.1 +28.5%
Net margin after credit loss 12.0
allowance 13.7 14.6% 47.4 38.4 23.4%
Profit before tax 10.5 8.5 23.7% 35.2 25.0 41.0%
Net income 8.1 6.4 +26.6% 27.1 19.0 +42.6%
RUB bn 31 December 2018 1 January 2018 Change
Total Assets 375.5 259.3 +44.8%
Net loans and advances to customers 198.5 129.7 +53.0%
Cash and treasury portfolio 135.1 96.5 +40.0%
Total Liabilities 333.2 227.1 +46.7%
Customer accounts 280.9 179.0 +56.9%
Total Equity 42.3 32.1 +31.5%
Tier 1 capital ratio 14.9% 17.7% -2.8pp
Total capital ratio 14.9% 17.8% -2.9pp
CBR N1.0 (capital adequacy ratio) 13.9% 16.3% -2.4pp
The Group delivered another strong set of results in 2018 thanks to the
continued rapid growth of its credit business and the robust performance
of its transactional business lines.
As a result, the Group reported net income for 4Q'18 and FY18 of RUB 8.1
bn and RUB 27.1 bn, respectively. Both numbers are record results for the
Group. This translated into ROE of 81.2% for 4Q'18 and 74.7% for FY18.
In FY18, the Group issued 2.7 m credit products, including 1 m in 4Q'18.
While credit cards continued to perform steadily, the share of other
credit products - personal loans, POS loans, car loans and home equity
loans - grew to 26.9% of the net loan book in 4Q'18 (4Q'17: 8.2%). The
total volume of credit card transactions in FY18 grew 35.6% y-o-y to RUB
372.4 bn (FY17: RUB 274.6 bn).
In FY18, gross interest income grew by 27% y-o-y to RUB 75.5 bn (FY17: RUB
59.5 bn), while in 4Q'18 it was up 25% y-o-y to RUB 20.7 bn (4Q'17: RUB
16.6 bn), driven by growth in both the loan book and securities portfolio.
Gross interest yield decreased slightly to 34.1% in 4Q'18, while the
interest yield on the Group's securities portfolio rose to 7.4%. Gross
interest yield for FY18 amounted to 35.4% (FY17: 39.6%).
In 4Q'18, interest expense grew by 25% y-o-y to RUB 4.3 bn (4Q'17: RUB 3.4
bn). The cost of borrowing fell to 5.9% in 4Q'18 (4Q'17: 6.9%) as funding
became less costly in both the wholesale and customer segments.
In 4Q'18, net margin grew by 24% y-o-y to RUB 16.1 bn (4Q'17: RUB 13.0
bn). Net interest margin (NIM) stood at 21.8% in 4Q'18 (4Q'17: 24.5%).
The Group continues to focus on controlling its cost of risk and
efficiently managing the quality of its portfolio. Cost of risk stood at
4.2% (4Q'17: 2.7%), while the risk-adjusted net interest margin decreased
to 18.6% in 4Q'18 (4Q'17: 22.6%), both post-IFRS 9.
The Group continues to develop new business lines, all of which are
demonstrating robust growth, with the SME business performing
exceptionally well and starting to contribute to the bottom line. In FY18,
the Group's fee and commission income increased by an impressive 77% y-o-y
to RUB 27.4 bn (FY17: RUB 15.5 bn).
At the end of 2018, the Group had around 4.5 mn current account customers
with a total balance of over RUB 137.6 bn across all their accounts. The
Group's SME business has grown its customer base to 425k SME customers in
2018, with RUB 41.7 bn in total on their current accounts.
The newly relaunched Tinkoff Investments continues to develop rapidly,
growing nearly 4x year-on-year and hitting 310 thousand brokerage accounts
as of 31 December 2018. Transaction volumes have grown sixfold
year-on-year, while fee and commission income from Tinkoff Investments has
grown thanks to the acquisition of professional traders who generate many
transactions with low fees per trade. Following the launch of Tinkoff
Investments' own brokerage platform earlier in the year, Tinkoff
Investments customers have access to robo-advisors, customised business
news reports and research via the app. As of 31 December 2018, the Tinkoff
Investments app had been downloaded more than 1.5 million times. One in
three of all new retail investment accounts on the Moscow Exchange are
opened via Tinkoff Investments. According to Moscow Exchange data for
2018, Tinkoff Investments is the second largest broker on Moscow Exchange
by a number of active accounts.
The Group continues to develop its mortgage platform in partnership with
11 banks, through which it originated over RUB 8.0 bn of mortgage loans in
4Q'18. The mortgage business has seen its market share steadily increase
quarter-on-quarter, reaching 0.9% at the end of the reporting period.
Operating expenses increased by 39% year-on-year in 2018 due to continued
growth of acquisition expenses and new business development. The Group is
maintaining its focus on controlling costs. Cost-to-income ratio for the
year decreased to 42.2% (FY17: 43.2%).
In 4Q'18, the Group reported record net income of RUB 8.1 bn (4Q'17: RUB
6.4 bn). Net income for FY18 amounted to RUB 27.1 bn (FY17: RUB 19.0 bn).
In FY18 the Group continued to maintain a strong balance sheet, with total
assets growing by 44.8% to RUB 375.5 bn (1 Jan'18: RUB 259.3 bn).
In FY18 the Group's gross loan book grew by 40.8% to RUB 234.7 bn (1
Jan'18: RUB 166.7 bn), while the net loan book grew by 53.0% to RUB 198.5
bn (1 Jan'18: RUB 129.7 bn).
As at 31 December 2018, the Group's NPL ratio stood at 9.4%. The Group's
loan loss provision coverage stood at 1.6x non-performing loans.
The Group's customer accounts increased by 56.9% YTD to RUB 280.9 bn (1
Jan'18: RUB 179.0 bn).
In FY18, the Group's total equity increased by 31.5% to RUB 42.3 bn (1
Jan'18: RUB 32.1 bn). As of 1 January 2019, the Group's statutory N1.0
ratio stood at 13.9% and its N1.2 ratio had decreased to 13.2%. N1.1 stood
at a comfortable 9.4%.
***
The Tinkoff management team will host an investor and analyst conference
call at 14:00 UK time (17:00 Moscow time, 10:00 U.S. Eastern Daylight
Time), on Tuesday, 12 March 2019.
The press release, presentation and financial statements will be available
on the Tinkoff website at
2 https://www.tinkoff.ru/eng/ir/financials/quarterly-earnings/
To participate in the conference call, please use the following access
details:
8281750
Conference ID
Russian Federation - Local +7 495 646 9190
+44 (0)330 336 9411
United Kingdom - Local
+1 646-828-8144
United States of America - Local
A live webcast of the presentation will be available at
https://webcasts.eqs.com/tcsgroup20190312
Please register approximately 10 minutes prior to the start of the call.
For enquiries:
Tinkoff Bank
Tinkoff Bank
Larisa Chernysheva
Darya Ermolina IR Department
Head of PR
+ 7 495 648-10-00 (ext. 2312)
+ 7 495 648-10-00 (ext. 2009)
4 ir@tinkoff.ru
3 d.ermolina@tinkoff.ru
About the Group
TCS Group Holding PLC is an innovative provider of online retail financial
services. It includes Tinkoff Bank, mobile virtual network operator
Tinkoff Mobile, Tinkoff Insurance, and Tinkoff Software DC, a network of
development hubs in major Russian cities. The Group also has Tinkoff.ru,
an evolving ecosystem that 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, the country's first and only
direct bank and the core of the Tinkoff.ru ecosystem.
Tinkoff Bank is the second largest player in the Russian credit card
market, with a share of 11.8%. The full year 2018 IFRS net income of TCS
Group Holding PLC amounted to RUB 27.1 bn (a record high full year net
income in the Group's history), ROE grew to 75%.
With no branches, the Group serves all its customers remotely via online
channels and a cloud-based call centre staffed by over 10,000 employees,
which makes it one of the largest in Europe. To ensure smooth delivery of
the Group's products, the Group has a nationwide network of over 2,500
representatives.
In 2018 Global Finance named Tinkoff Bank the world's Best Consumer
Digital Bank, in 2018, 2016 and 2015, the Best Consumer Digital Bank in
Russia, and in 2017 and 2013 The Banker recognised it as the Bank of the
Year in Russia. 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.: 7777
EQS News ID: 786339
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
5 fncls.ssp?fn=show_t_gif&application_id=786339&application_name=news&site_id=reuters8
References
Visible links
1. https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=3efbc167d81ec545c71b3bfef9d1e099&application_id=786339&site_id=reuters8&application_name=news
2. https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=7621881e2aa226803a4aac95ac2386f3&application_id=786339&site_id=reuters8&application_name=news
3. mailto:d.ermolina@tinkoff.ru
4. mailto:ir@tcsbank.ru
============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