15 Nov 2013 11:12
"TINKOFF CREDIT SYSTEMS" BANK
STATEMENT REGARDING SPECULATION ON THE LATEST DRAFT LAW ON CONSUMER LENDING
Moscow, Russia - 15 November 2013. TCS Group Holding PLC (TCS LI) (the "Company") together with its consolidated subsidiaries (collectively, "TCS"), including "Tinkoff Credit Systems" Bank (Closed Joint Stock Company) ("TCS Bank"), Russia's leading provider of online retail financial services, today issues the following statement in response to the speculation in the Russian media regarding legislative changes that could have a potential impact on consumer lending activities in Russia.
The Law on Consumer Lending has been in the pipeline for several years. It is now going through the second reading in the State Duma which is expected to result in further amendments. TCS welcomes this. This is a multi-layered process involving many parties and with such a complex piece of legislation, it is obvious that at times, certain ambiguous clauses such as this, may be open to different interpretations and further revised later.
The currently proposed new clause has been misinterpreted by some commentators and has been read as meaning that credit cards can only be collected by customers at a fixed location (i.e. branch). Our understanding from conversations with the authors of this legislation is that the legislators intend to target unsolicited, blanket mailings of credit cards which gives us a good reason to believe that this clause will be amended. Furthermore, it is our understanding that TCS Bank's courier service does not come under this clause as it stands because we deliver cards only with the prior consent of the customer.
TCS Bank does not send unsolicited credit cards to Russian consumers. All of our customers have read the marketing materials, through online and offline acquisition channels, and make a conscious choice to select our product. Only after their application has been processed and verified, and the application has been approved, do we deliver a card directly to the customer using our special, in-house courier delivery network which covers most of Russia.
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For enquiries:
"Tinkoff Credit Systems" Bank (Closed Joint Stock Company)
Sergey Pirogov
+7 985 991 2046
FTI Consulting London
Larisa Millings
+44 (0)20 7269 7153
FTI Consulting Moscow
Maria Shiryaevskaya
+7 495 795 06 23
About TCS Bank
TCS Bank is an innovative provider of online retail financial services operating in Russia through a high-tech branchless platform.
Since its launch in 2007 by Mr. Oleg Tinkov, one of the best known Russian entrepreneurs with a long track record of creating successful businesses, TCS Bank has grown into a leader in the Russian credit card market, with the third largest credit card loan portfolio and a market share of 7.7% based on non-delinquent receivables (according to Central Bank of Russia ("CBR") data, as of 1 July 2013). As of 30 June 2013 TCS Bank had issued over 3.5 million credit cards.
In addition to a market-leading credit card offering, TCS Bank has developed a successful online retail deposits programme and currently has been expanding to bring additional innovative online products and services to Russian consumers, including mobile financial services, payment solutions and insurance.
TCS Bank has built an advanced high-tech retail financial services platform that provides deep reach all over Russia, including underserved parts of the country. This platform serves customers remotely through award-winning Internet and mobile banking interfaces and high-volume call centres. Operating flexibility and reach are further enhanced by TCS Bank's use of direct marketing channels that enable it to attract new customers practically anywhere in Russia.
TCS Bank has built a high-volume business and attracted over 500,000 credit card applications in June 2013 alone. In order to support its branchless platform, TCS Bank has also developed a "smart courier" network covering almost 600 cities and towns in Russia which allows next day delivery to many customers. Robust data and risk management underpin TCS's continuing success, as does its focus on high quality customer service.
As of 30 June 2013, TCS Bank's total assets amounted to US$2,419 million, loans and advances to customers stood at US$1,952 million and customer accounts (deposits) amounted to US$977 million. In the six months ended 30 June 2013, TCS Bank generated a net profit of US$79 million and net interest income of US$394 million, as compared with US$52 million and US$207 million in the first six months of 2012.
As of 31 December 2012, TCS Bank's total assets amounted to US$2,173 million, loans and advances to customers stood at US$1,573 million and customer accounts (deposits) amounted to US$878 million. In 2012, TCS Bank generated profit for the year of US$122 million and net interest income of US$500 million, as compared with US$68 million and US$254 million in 2011, and US$9 million and US$96 million in 2010.
TCS Bank is well capitalised with the CBR N1 capital adequacy ratio at 17.1% as of 1 July 2013, while under international Basel III guidelines, its total capital ratio was 22.0% and Tier 1 capital ratio was 15.0% as of 30 June 2013.
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 Company or TCS 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 Company and TCS Bank wish to caution you that these statements are only predictions and that actual events or results may differ materially. The Company and TCS 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 Company or TCS Bank, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries TCS Bank operates in, as well as many other risks specifically related to the Company, TCS Bank and their respective operations.