IR-Center Handelsblatt

TCS Group Holding PLC

News Detail

DGAP-UK-Regulatory News vom 06.08.2020

TCS Group Holding PLC reports strong financial performance in 2Q'20 and 1H'20; announces 3rd 2020 interim dividend

TCS Group Holding PLC (TCS)
06-Aug-2020 / 10:00 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 reports strong financial performance in 2Q'20 and 1H'20; announces 3rd 2020 interim dividend


  • Net margin up 19% year-on-year to RUB 26.1 bn in 2Q'20
  • Net income of RUB 10.2 bn in 2Q'20
  • 1.7 mn new credit accounts and 1 mn brokerage accounts added in 1H'20
  • Return on equity of 40.0% in 2Q'20


LIMASSOL, CYPRUS - 6 August 2020. TCS Group Holding PLC (LI: TCS, MOEX: TCSG) ("Tinkoff", "We", the "Group", the "Company"), Russia's leading provider of online financial and lifestyle services via its Tinkoff ecosystem, today announces its interim condensed consolidated IFRS results for the three months and six months ended 30 June 2020.



Oliver Hughes, CEO of Tinkoff Group, commented:

"Tinkoff's resilient, fully online business model enabled us to deliver good performance in a period of unprecedented uncertainty due to the global COVID-19 pandemic and against a difficult economic backdrop. We adapted quickly to the changing business environment, while remaining focused on innovation for customers and profitability for shareholders. As a result, net income rose 25% year-on-year to RUB 10.2 bn in 2Q'20. Meanwhile, our ROE remained at a respectable 40.0%.


On the lending side of the business, we adopted a conservative stance starting in mid-March, implementing a range of cautious measures in credit limit management, sectoral scoring and deep verification. While this remained largely intact in 2Q'20, we saw the economic situation steadily improve towards the end of the quarter and we gradually increased our approval rates back to pre-COVID-19 levels.


Our Tinkoff Black product demonstrated good growth in the second quarter, bringing 1.2 mn new current account customers into the Tinkoff ecosystem. During the period, we rolled out a new pre-paid Tinkoff Black product that can be opened without a physical KYC meeting. This virtual card converts to a fully-fledged Tinkoff Black debit card once the customer has been taken through the identification process by one of our 'smart couriers'. This has proven an extremely timely product innovation and we are confident it will further accelerate Tinkoff Black customer acquisition.


Tinkoff Investments continues to fire on all cylinders, adding over 1 million new brokerage customers since the start of the year. Assets under custody have grown fivefold. We have been investing heavily in growth of the customer base and engagement, while expanding the educational resources available to our customers. In June, we launched a new micro-investment service called Investment Box, which allows customers to set up regular top-ups of their investment account from their Tinkoff Black card. With nearly 1.9 million brokerage customers, we are the #1 retail brokerage on MOEX by number of active customers.


A crucial part of our ecosystem's success is the Tinkoff Superapp, and we are proud of the many developments that have been made in the second quarter. At a time when many customers were limited in their mobility, the Tinkoff Superapp played an important role in supporting their daily purchases, transfers, payments, entertainment, fitness and other home-based activities. The Superapp's monthly active users (MAU) increased by 50% year-on-year during the second quarter, as we rolled out a new partnership with, a marketplace that brings together Russia's leading online stores.


Tinkoff's CoronaIndex shows us that business activity is quickly returning to pre-COVID-19 levels in Russia.  Consumer spending and SME revenues have improved steadily since the beginning of the second quarter. Looking forward, we expect the autumn will be a critical time to see the shape of the medium-term recovery.


Tinkoff Group has weathered another storm and proven yet again the flexibility and resilience of its business model. We remain in a strong position today to capture the opportunities to disrupt and grow."




RUB bn







Credit accounts acquired (mn pcs)







Net margin







Net margin after provisions







Profit before tax







Net income







Return on equity



-24.7 p.p.



-25.8 p.p.

Net interest margin



-4.5 p.p.



-3.2 p.p.

Cost of risk



+3.6 p.p.



+6.0 p.p.



RUB bn

30 Jun 2020

31 Dec 2019


Total assets




Net loans and advances to customers




Share of NPLs



+1.7 p.p.

Cash and treasury portfolio




Total liabilities




Customer accounts




Total equity




Tier 1 capital ratio




Total capital ratio




CBR N1.0 (capital adequacy ratio)






In 2Q'20, the Group's total revenue grew by 21% y-o-y to RUB 49.1 bn (2Q'19: RUB 40.4 bn). Gross interest income increased by 14% y-o-y to RUB 31.9 bn (2Q'19: RUB 27.9 bn), driven by the continued growth of our loan portfolio, customer base, and credit product range.

Gross interest yield remained firm at 32.1% in 2Q'20 due to our stable asset mix. The interest yield on the Group's securities portfolio decreased to 5.4% (2Q'19: 6.9%), primarily due to declining interest rates.


In 2Q'20, despite the 42% y-o-y increase in our funding base as we continued to grow our customer base and account balances, interest expense rose only by 2% y-o-y to RUB 5.6 bn (2Q'19: RUB 5.5 bn).This was driven by a continued decline in our cost of borrowing from 6.2% in 2Q'19 to 4.4% in 2Q'20, following a gradual decrease in deposit rates, and the reduction in the deposit insurance fees.


In 2Q'20, net margin grew by 19% y-o-y to RUB 26.1 bn (2Q'19: RUB 22.0 bn), primarily as a result of solid y-o-y net loan portfolio growth, gross interest yield resilience, and declining funding costs.


Cost of risk rose y-o-y to 12.5% in 2Q'20 (2Q'19: 8.9%), but declined q-o-q from 15.9% in 1Q'20. Relative to 2Q'19, the increase was driven by the challenges posed by the COVID-19 outbreak. At the same time, the q-o-q decline was driven by the front-loading of loan provisions in 1Q'20 in accordance with IFRS9. Our risk-adjusted net interest margin remained comfortably positive at 9.8% in 2Q'20 (2Q'19: 16.3%).


Our non-credit business lines continue to deliver robust performance thanks to customer base growth and continued monetisation efforts, now representing 37% of the Group's revenue. In 2Q'20, fee and commission revenue rose by 19% y-o-y to RUB 10.2 bn (2Q'19: RUB 8.6 bn) and remained flat q-o-q despite the challenges posed by the COVID-19 outbreak. Tinkoff Investments had a stellar performance in 2Q'20, with revenue growth of 10.5x y-o-y and 87% q-o-q to RUB 1.6 bn (2Q'19: RUB 0.15 bn, 1Q'20: RUB 0.8bn), accounting for 14% of total fee and commission revenue.


At the end of 2Q'20, the Group had:

  • over 9.3 mn current account customers with a total balance of RUB 270.1 bn across all accounts
  • over 565k SME customers, with a total current account balance of RUB 57.4 bn
  • 1.9 mn Tinkoff Investments brokerage customers.


In 2Q'20, operating expenses increased 7% y-o-y to RUB 12.9 bn (2Q'19: RUB 12.1 bn) driven by continued investment in new, growing business lines. Despite this, the cost-to-income ratio decreased to 32.3% in 2Q'20 (2Q'19: 39.8%).


The Group reported robust quarterly net income of RUB 10.2 bn in 2Q'20 (2Q'19: RUB 8.2 bn). As a result, ROE for 2Q'20 stood at 40.0% (2Q'19: 64.7%).


In 2Q'20, the Group continued to maintain a healthy balance sheet with total assets growing by 15% since the end of 2019 to RUB 669.2 bn (31 Dec'19: RUB 579.5 bn).


Given the more conservative lending stance taken in 2Q'20, the Group's gross loan book grew by 3% as at the end of 2Q'20 to RUB 395.0 bn (31 Dec'19: RUB 383.9 bn), while the net loan book decreased by 2% to RUB 324.2 bn (31 Dec'19: RUB 329.2 bn).


The Group's NPL ratio rose to 10.8% (31 Dec'19: 9.1%) due to the consequences of the COVID-19 outbreak and the denominator effect as loan book growth slowed in 2Q'20, while our loan loss provision coverage stood at 1.7x non-performing loans.


The Group's customer accounts increased by 15% to RUB 473.9 bn (31 Dec'19: RUB 411.6 bn).


Tinkoff's total equity rose 12% in 1H'20 to RUB 108.1 bn (31 Dec'19: RUB 96.1 bn) despite the payment of two 2020 interim dividends (total of $0.35/GDR), and thanks to the strong net income result. As of 1 July 2020, the Group's statutory N1.0 ratio amounted to 12.4%, its N1.2 ratio rose to 12.1%, and N1.1 ratio rose to 10.1%.





While some uncertainty remains, we believe we have enough visibility to reintroduce 2020 guidance under the assumption of a gradual recovery in economic activity:


  • We expect our net loan portfolio to return to steady growth in 2H20
  • We expect cost of risk to be in the 12% area
  • We expect cost of borrowing to be in the 5% area
  • We expect net income to be RUB 30-35bn


Third 2020 Interim Dividend Announcement


In line with the Group's dividend policy, the Group's Board of Directors has approved a third 2020 interim gross cash dividend of USD 0.20 per share/per GDR (with each GDR representing one class A share) with a total amount allocated for dividend payment in relation to 2Q of around USD 39.9 mn. Subject to London Stock Exchange regulations, indicatively the dividend will be payable on 24 August 2020 to those shareholders on the register as at the record date of 21 August 2020. The ex-dividend date will be 20 August 2020. According to the terms of the GDR deposit agreement, holders of the Group's GDRs should receive their dividends approximately 5 business days after the payment date.





Customer base and engagement growth has led to increased market share

  • The Group had over 9.3 mn current accounts customers as at 1 July 2020
  • As of 1 July 2020, the Tinkoff app had over 20 mn installs, MAU stood at 6.1 mn, DAU stood at 2.0 mn
  • Tinkoff Bank's credit card market share increased to 13.5% as of 1 July 2020, further solidifying its position as Russia's second largest credit card issuer


Superior and innovative product offering combined with targeted marketing activities secure Tinkoff's place as a leading fintech brand

  • Tinkoff was named European Retail Bank of the Year at the Retail Banking International Awards 2020, in recognition of the outstanding growth, profitability, and success of the business and its financial and lifestyle ecosystem.
  • Tinkoff has once again been named as one of Europe's top 50 merchant acquirers for 2019 and one of the top 45 acquiring banks by card payments from merchants, according to the annual electronic banking survey conducted by The Nilson Report. Tinkoff is also one of the top 5 Russian banks included in the ranking. 
  • In June, Tinkoff Investment launched its new Investment Box function - Russia's first micro-investment service. This service allows customers to set up regular top ups of their investment account from their Tinkoff Black card. This can be done by rounding up transaction values, reinvesting cashback, reinvesting the interest earned on the current account, or setting up a monthly or weekly automatic investment.
  • In June, Tinkoff Education launched free online IT lectures. Tinkoff Education is the business through which we provide educational material for students and graduates. These free IT online lectures focus on the building blocks of IT companies and overviews of the various jobs and roles within Tinkoff. So far, four courses have been made available on information security, systems analysis, design, and product analytics.


Resilience and investment in customer loyalty amid the global COVID-19 pandemic

  • Tinkoff's first priority was to safeguard the health and safety of its employees, while ensuring business continuity for all its customers. As a testament to this swift and early response, Tinkoff has only had 19 confirmed COVID-19 cases among its 27,000 employees. By the second week of March, over 95% of its office-based employees had successfully moved to home working. Only around 200 vital employees remain in the office, and its smart couriers continue to deliver products safely all over Russia. Tinkoff has decided to reward the commitment and the dedication of other frontline staff by increasing their remuneration by 15-20% during this difficult period. Employees are not expected to return to the office at least until September 1, as we continue to prioritise the health and safety of our employees.
  • Tinkoff is proactively assisting troubled borrowers by offering both government and proprietary restructuring programs. In the period between March 20 and July 31, Tinkoff restructured a total of 248k loans, 3.5k of which were restructured according to the government programme. As of July 31, 92k loans remained restructured, amounting to RUB 17.7bn, or 4.5% of the total loan book.
  • Tinkoff Home Call Centre (HCC) has deployed its cloud-based HCC platform to assist the Moscow City Government and the People's Social Front (a consumer protection organisation) in fielding calls from people experiencing COVID-19 and related problems.
  • Tinkoff Business has launched a service allowing the self-employed to register with the tax authorities and easily manage their income and taxes. We are also assisting offline small business to relocate to the cloud and have lowered online acquiring fees for purchases of several essential products and services. We launched 0% loans to pay salaries in partnership with the Russian Bank for SME support.
  • Tinkoff Mobile has implemented functions allowing customers to open accounts using virtual SIM cards, to delay payment of mobile services by up to two weeks without charge, to waive certain roaming fees for customers not able to return to Russia, to record and store voice calls, and to use unlimited data for remote working apps like Zoom, Skype and Slack.
  • Tinkoff introduced a cash-back offer called "Surviving Quarantine" which gives customers discounts of up to 75% on online services, products, and subscriptions that are particularly in demand during isolation (online cinema, home fitness, books, language courses, etc.).
  • Tinkoff Black broadened its cashback offers and increased their relevance for customers.  Customers now have greater control over the cash-back offers they can select through the mobile app.
  • Tinkoff agreed with key payment services Mastercard, Visa, and Mir to delay the expiration of bank cards beyond March / April 2020 and implemented a system to receive money back on items purchased using the Fast Payment System's QR codes.


Commitment to further improving our ESG and sustainability disclosure and practices

  • In June, Tinkoff Group published our latest 2019 sustainability report. In this year's edition, among many other things, we discuss in more detail our COVID-19 response, our recruitment philosophy, our responsible lending approach, our data security framework, and minorities' protection under the current corporate governance structure.
  • Tinkoff's ESG score from Refinitiv recently improved from D+ to C+, with improvements across environmental, social, and governance metrics.
  • The Tinkoff IR team invites feedback from the investor community and other stakeholders regarding the Group's ESG initiatives and disclosures. The IR team's contact information can be found at the end of this release.


Other corporate developments

  • Tinkoff signed a long-term contract with AFI Development to rent the AFI Square business centre in Moscow, currently under construction, to become Tinkoff's new headquarters. The 90,000 m2 office building is scheduled to be completed in the first half of 2022. The new HQ in AFI Square would have capacity for more than 6,000 people. The office will feature an ultra-modern workspace, well-equipped for tech professionals. It will also have spacious seating areas, and comfortable recreational areas. The office will accommodate the projected growth in staff levels, but also take into account projected changes in working practices such as remote working and 'hot desks'. Tinkoff employees voted to name the new office "Tinkoff Space".



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, 6 August 2020.

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

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

Conference ID





Russian Federation


+7 495 646 9190

8 10 800 2867 5011

United Kingdom


+44 (0) 330 336 9411

0800 279 7204

United States of America


+1 720-543-0214



A live webcast of the presentation will be available at:



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


For enquiries:


Artem Lebedev
PR Department

+ 7 495 648-10-00 (ext. 2202)

Alexandr Leonov

+ 7 495 648-10-00 (ext. 35738)

[email protected]



Larisa Chernysheva
IR Department

+ 7 495 648-10-00 (ext. 2312)

Neri Tollardo

+44 7741 078383

[email protected]



About Tinkoff 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, 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 around 11 mn customers and forms the core of the Tinkoff ecosystem.


Tinkoff Bank is the second largest player in the Russian credit card market, with a share of 13.5%. The 2Q 2020 IFRS net income of TCS Group Holding PLC amounted to RUB 10.2 bn. The ROE was 40.0%.


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 2,500 representatives.


In 2018, Global Finance named Tinkoff Bank the world's Best Consumer Digital Bank, and in 2019, 2018, 2016 and 2015, the Best Consumer Digital Bank in Russia. In 2017 and 2013, the Banker recognised Tinkoff Bank 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.

show this