TCS Group Holding PLC Announces 3Q and 9M 2017 IFRS Results and Interim Dividends

Moscow, Russia – 20 November 2017.
TCS Group Holding PLC (TCS LI) (the "Group"), Russia's leading provider of online retail financial services via its financial supermarket, today announces its interim condensed consolidated IFRS results for the third quarter and for the nine months ended 30 September 2017.


3Q 2017

  • Net margin up 41% y-o-y to RUB 12.2 bn (3Q16: RUB 8.7 bn)
  • Profit before tax up 67% y-o-y to RUB 6.6 bn (3Q16: RUB 4.0 bn)
  • Net income up 75% y-o-y to RUB 5.0 bn (3Q16: RUB 2.9 bn)
  • ROE increased to 53.7% (3Q16: 43.4%)
  • Net interest margin at 25.1% (3Q16: 25.5%)
  • Cost of risk at 6.0% (3Q16: 8.3%)

9M 2017

  • Net margin grew by 37% y-o-y to RUB 33.1 bn (9M16: RUB 24.2 bn)
  • Profit before tax up 70% y-o-y to RUB 16.5 bn (9M16: RUB 9.7 bn)
  • Net income up 73% y-o-y to RUB 12.6 bn (9M16: RUB 7.3 bn)
  • ROE grew to 48.8% (9M16: 39.0%)
  • Net interest margin at 25.6% (9M16: 25.7%)
  • Total assets increased by 35% to RUB 236.0 bn (YE16: RUB 175.4 bn)
  • Gross loans and advances to customers up 27% to RUB 153.4 bn (YE16: RUB 120.4 bn)
  • Net loans and advances to customers up 30% to RUB 134.1 bn (YE16: RUB 102.9 bn)
  • Share of non-performing loans (NPLs) at 9.4% (YE16: 10.2%)
  • Customer accounts increased by 25% to RUB 155.7 bn (YE16: RUB 124.6 bn)
  • Total equity up by 33% to RUB 39.1 bn (YE16: RUB 29.5 bn)


  • In 9M17 over 1.3M new active credit card customers were acquired, underpinning net loan growth of 30% YTD
  • In July 2017 Tinkoff Bank was named the most profitable bank in Central and Eastern Europe by The Banker magazine
  • In July 2017 Global Finance declared Tinkoff Bank the winner in two of the World’s Best Consumer Digital Banks 2017 award categories
  • In August 2017 Tinkoff Bank started the gradual deployment of its own ATM network. There are now approximately 200 installed across Russia
  • In August 2017 Tinkoff mobile banking app was recognized as best in Russia by Markswebb Rank & Report in four nominations — apps for iPhone, Android and Windows smartphones and apps for iPads


  • As of 1 October 2017 Tinkoff Bank was the second largest credit card player in Russia with a market share of 11.6%
  • In October 2017, the Group acquired a 55% stake in CloudPayments, an innovative online payment solutions provider. The deal will enable Tinkoff to enhance its merchant acquiring business line as part of its growing SME offering
  • In November 2017, the Tinkoff mobile banking app was named as best in CIS by Markswebb Rank & Report

Third 2017 Interim Dividend and Special Interim Dividend Announcements

In line with the Group’s dividend policy, the Board of Directors yesterday approved a third interim gross dividend for 2017 of USD 0.22 per share/GDR (with each GDR representing one share), with a total dividend payment of around USD 40.2 mn (RUB 2.4 bn).  In addition to this, and due to the stronger than expected bottom-line result, the Board of Directors approved a special interim dividend of USD 0.18 per share/GDR (with each GDR representing one share), with a total dividend payment of around USD 32.9 mn (RUB 2.0 bn).

Subject to London Stock Exchange regulations, indicatively the dividends will be payable around 6 December 2017, to those shareholders on the Group’s register as at the record date of Friday, 1 December 2017. The ex-dividend date will be 30 November 2017.

According to the terms of the GDR deposit agreement, holders of the Group’s GDRs will receive their dividends approximately 5 business days after the payment date.


Following strong underlying growth in the first nine months of 2017, the Group is pleased to reaffirm its FY17 performance guidance and provide the following guidance for FY18:

  • net income to be at least RUB 24 bn
  • net loan growth to be at least 25%
  • cost of risk to be around 7-8%
  • cost of borrowing to be around 7-8%

NB. This guidance is based on IAS39 and not IFRS9.  There may be some changes when Tinkoff moves to IFRS9 from 1 January 2018.

Oliver Hughes, CEO of Tinkoff Bank, commented:

“In 3Q 2017, the Group delivered another strong set of results, driven by significant loan growth, good credit quality, and the new business lines hitting break-even. We have posted net income of RUB 5.0 bn, bringing our total net income for nine months to RUB 12.6 bn. With continued robust net income performance, the Group reports an ROE of 48.8% for the year to date.

“Our diversification process has continued to show impressive results, with non-credit businesses contributing increasingly to both the top and bottom lines. As of today over 22% of our top line result comes from non-credit business lines. Tinkoff Business broke even in June this year and doubled its customer base since the beginning of the year, and we plan to reach around 250,000 opened accounts by year-end. Tinkoff Mortgage is well on track to exceed our target of RUB 7 bn of mortgage loans disbursed by the end of the year. We now have 10 partner banks and expect this business line to break even by year-end. We continue to expand Tinkoff Investments, which now has almost 65,000 brokerage accounts opened. 

“At the same time, our core credit card business is having another excellent year. We added over 550,000 new credit cards activated in the third quarter, underpinning net loan growth of 30% year-to-date. Credit quality is good, the risk profile of incoming customers is stable and cost of risk is low at 6.0% for the second quarter in a row. Tinkoff’s cost of borrowing stands at 7.7% after the placement of the USD 300 mn perpetual Tier 1 Eurobond in June.

«We also continue to innovate our processes to continuously increase operational efficiency. For example, our use of voice recognition technology allows us to save around 720 hours of employee time per month, while using chat bots to field 20% of all of the incoming queries without connecting to an employee also helps keep costs down.

“Thanks to the robust performance in 3Q, we can reiterate our guidance for net profit of over RUB 17 bn for the full year and give new guidance of at least RUB 24 bn for 2018. We are also delighted to announce that, in line with the Group's dividend policy, the Board of Directors has approved two dividends: the first is RUB 2.4 bn in line with the dividend policy; the second is a special interim dividend of RUB 2.0 bn which we are able to pay as a result of the stronger than expected bottom-line results.”


RUB bn







Credit cards issued (’000 pcs)







Credit card







Net margin







Net margin after loan impairment







Profit before tax







Net income







RUB bn

30 September

31 December


Total Assets




Net loans and advances to customers




Cash and treasury portfolio




Total Liabilities




Customer accounts




Total Equity




Tier 1 capital ratio




Total capital ratio




CBR N1.0 (capital adequacy ratio)




The Group delivered another strong set of results for 3Q and 9M17 following accelerating growth of its core credit card business and the excellent performance of its new business lines.

As a result, the Group reported a net income for 3Q17 and 9M17 of RUB 5.0 bn and RUB 12.6 bn respectively. This translated into ROE of 53.7% for 3Q17 and 48.8% for 9M17.

In 9M17, the Group issued 1.76M credit cards, including 735,000 in 3Q17. The total volume of credit card transactions in 9M17 grew by 56% y-o-y to RUB 194.6 bn (9M16: RUB 124.7 bn).

In 9M17, gross interest income grew by 23% y-o-y to RUB 42.9 bn (9M16: RUB 34.8 bn), while in 3Q17 it was up 30% y-o-y to RUB 15.8 bn (3Q16: RUB 12.2 bn), driven by growth in both the loan book and securities portfolio. Gross interest yield stayed at 40.0% in 3Q17, while the interest yield on the Group’s securities portfolio stayed at 7.3%. Gross yield for 9M17 amounted to 39.5% (9M16: 40.0%).

In 3Q17, interest expense grew by 2% y-o-y to RUB 3.45 bn (3Q16: RUB 3.4 bn). The cost of borrowing stayed at 7.7% in 3Q17 following declining retail deposit rates.

In 3Q17, net margin grew by 41% y-o-y to RUB 12.2 bn (3Q16: RUB 8.7 bn), while in 9M17 it increased by 37% y-o-y to RUB 33.1 bn (9M16: RUB 24.2 bn). The net interest margin (NIM) stood at 25.1% in 3Q17 (3Q16: 25.5%) and at 25.6% in 9M17 (25.7% in 9M16). Due to lower cost of risk, the risk-adjusted net interest margin increased to 20.6% in 3Q17 (3Q16: 18.6%) and to 20.5% in 9M17 (9M16: 18.3%).

The Group continues to focus on controlling its cost of risk and efficiently managing the quality of its portfolio. In 3Q17, the cost of risk stayed at a low 6.0% for the second quarter in a row (3Q16: 8.3%), with the 9M17 cost of risk decreasing to 6.5% from 8.5% in 9M16.

The Group continues to develop its new business lines, all of which are demonstrating robust growth, with the SME business performing exceptionally well. In 9M17, the Group’s fee and commission income increased by 74% y-o-y to RUB 10.1 bn (9M16: RUB 5.8 bn).

At the end of 9M17, the Group had over 2.4 mn current account customers with a total balance of over RUB 62 bn across all their accounts. The Group’s SME business doubled its customer base since the beginning of the year to 190,000 SME customers, with over RUB 17.5 bn in total on their current accounts. This business line broke even in June 2017 and is on track to reach over 250,000 opened accounts by year-end. Net income for 3Q17 amounted to RUB 0.37 bn.

The Group continues to develop its mortgage platform in partnership with 10 banks, through which it originated over RUB 3.0 bn of mortgage loans in 3Q17. The Group expects the mortgage platform to break-even in 4Q17 and expects the platform to originate over RUB 7 bn of mortgage loans by the end of the year.

Tinkoff Investments continues to demonstrate robust growth with around 65,000 brokerage accounts opened as of 1 October 2017. With every fourth brokerage account currently opened via this service, the Group expects it to break even next year.

In 3Q17, operating expenses increased by 14% q-o-q due to continued growth of acquisition expenses. The cost-to-income ratio stood at a stable 42.3% in 3Q17.

In 3Q17, the Group reported a net income of RUB 5.0 bn (3Q16: RUB 2.9 bn). Net income for 9M17 amounted to RUB 12.6 bn (9M16: RUB 7.3 bn). As a result, ROE for 3Q17 reached 53.7%.

In 9M17, the Group continued to maintain a healthy balance sheet with total assets having increased by 35% to RUB 236.0 bn due to strong credit portfolio growth and proceeds from the Perpetual Subordinated Eurobond (YE16: RUB 175.4 bn).

In 9M17, the Group’s gross loan book grew by 27% to RUB 153.4 bn (YE16: RUB 120.4 bn) due to the increased number of new customers with over 550,000 new active credit card customers in 3Q17 and over 1.3M in 9M17.

The Group’s net loan book grew by 30% to RUB 134.1 bn (YE16: RUB 102.9 bn). As a result, Tinkoff Bank’s market share increased to 11.6% as of 1 October 2017, further solidifying its position as Russia’s second largest credit card issuer.

In 3Q17, the Group’s NPL ratio stayed flat at 9.4%. The Group’s loan loss provision coverage decreased to 1.3x non-performing loans.

The Group’s customer accounts increased by 25% YTD to RUB 155.7 bn (2Q17: RUB 140.2 bn; YE16: RUB 124.6 bn). In April 2017, Tinkoff Bank issued a 5-year RUB 5 bn bond with a put option in April 2019. In June 2017, Tinkoff Bank issued (through TCS Finance D.A.C., its Irish SPV) a USD 300 mln perpetual bond with a 9.25% coupon and with a call option in September 2022. Simultaneously, the Group bought back a substantial amount of its Tier 2 subordinated debt.

In 9M17, the Group’s total equity increased by 33% to RUB 39.1 bn (YE16: RUB 29.5 bn). The Group’s statutory capital ratios went up following the inclusion of perpetual debt in additional Tier 1 capital. As of 1 October 2017, the Group’s statutory N1.0 ratio was up at 16.0% and its N1.2 ratio had increased to 14.4%. N1.1 stood at a comfortable 9.8%. The Group expects the N1 total capital ratio to grow during the remainder of the year driven by retained earnings.


The Group intends to conduct an audit tender during 2018, in the context of the EU Regulation on audit reform of public interest entities.  A competitive tender process, open on equal terms to registered audit companies that meet the statutory requirements and the professional standards including the current external auditors, PwC, overseen by the Audit Committee of the Company, will be launched in 2018 with a view to identifying and appointing external auditors of the Group for accounting periods commencing on 1 January 2019 and thereafter.


The management team will host an investor and analyst conference call at 09.00 UK time (12.00 Moscow time, 04.00 U.S. Eastern Standard Time), on Monday, 20 November 2017.

The press release, presentation and financial statements will be available on the Tinkoff Bank website at

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

Conference ID


Russian Federation - Local

+7 495 213 1767

Russian Federation – Toll Free

8 800 500 9283

United Kingdom – Local

+44 (0)330 336 9105

United Kingdom – Toll Free

0800 358 6377

United States of America - Local

+1 323-794-2551

United States of America – Toll Free


A live webcast of the presentation will be available at 

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

For enquiries:
Tinkoff Bank
Darya Ermolina
Head of PR
+ 7 495 648-10-00 (ext. 2009)

Tinkoff Bank
Larisa Chernysheva
IR Department
+ 7 495 648-10-00 (ext. 2312)

FTI Consulting London
Elena Kalinskaya/ Leonid Fink
+44 (0) 020 3727 1000

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.

About the Group

TCS Group Holding PLC is an innovative provider of online retail financial services operating in Russia through a  high-tech branchless platform. TCS Group includes Tinkoff Bank, mobile virtual operator network Tinkoff Mobile, Tinkoff Insurance, and Tinkoff Software DC, a network of development hubs across Russia.

The Group was founded in 2006 by the Russian entrepreneur Oleg Tinkov and has been listed on the London Stock Exchange since October 2013.

With no retail branches, the Group serves its customers remotely via online channels and its call centre, and operates a network of over 2,500 representatives to ensure smooth delivery of its products. The network covers all of Russia and allows next day delivery to most customers.

The Group’s key business is Tinkoff Bank, Russia’s first and only direct bank offering both own brand and partner retail financial services via its platform. The product range includes daily banking (credit and debit cards, payments, money transfers), savings, investments, loyalty programmes, travel services, SME services, mortgage platform, and insurance. With its special focus on mobile business, the bank offers mobile applications both for its customer base (Mobile Bank) and beyond it (Traffic Fines, MoneyTalk, Card 2 Card instant money transfers).

As at 1 May 2018, the bank was the second largest player in the Russian credit card market, with a market share of 11.7%. The 1Q18 IFRS net income of TCS Group Holding PLC amounted to RUB 5.7 bn, ROE grew to 68.5%., Russia’s largest financial news portal, named Tinkoff Bank the Bank of the Year 2016. In October 2016 Tinkoff Bank was named the largest independent global direct bank by Frost & Sullivan. In 2015 and 2016, the Global Finance magazine named Tinkoff Bank as the Best Consumer Digital Bank in Russia. In 2016, the bank also won Global Finance’s Best Integrated Consumer Bank Site award and was named the Best Digital Bank in the CEE by Euromoney. The bank’s mobile application was recognised as the best in Russia by Markswebb Rank & Report for three consecutive years in 2014, 2015 and 2016, and by Deloitte for four consecutive years from 2013 to 2016.