TCS.L Regulatory News (TCS)

Statement on Tinkoff Bank's RAS Financial Highlights for January-March 2018

Moscow, Russia - 26 April 2018. TCS Group Holding PLC (TCS LI) (the "Group"), Russia's leading provider of online retail financial services via its Tinkoff.ru financial supermarket, today announces Tinkoff Bank's unaudited RAS financial highlights for March 2018.

For the first three months of 2018, net income stood at RUB 5.5bn versus RUB 4.7bn in January-March 2017, which is attributed to the growth of net interest income, lower cost of funding, improved quality of the loan portfolio and growth of revenue from new business lines.

It should be noted that the RAS net income figure is not a reliable indicator of IFRS net income for the same period. There is a very low correlation between financial results under the two reporting standards as a result of significant accounting differences. Therefore, RAS figures should not be used as the basis for conclusions on forthcoming IFRS results. 

The gross loan portfolio amounted to RUB 176bn representing an increase of 38% y-o-y. The net loan portfolio amounted to RUB 150bn having increased by 41% y-o-y and constituted 54% of total assets (51% at year-end 2017). 

Retail customer accounts stood at RUB 156bn. Tinkoff Bank continued to retain substantial liquidity: the CBR N2 ratio stood at 57% (minimum requirement: 15%), and the CBR N3 ratio was 147% (minimum requirement: 50%). Retail customer accounts constituted 68% of total liabilities.

Total assets increased by 59% y-o-y to RUB 277bn.

As of 1 April 2018, total capital including retained profits (based on Form 123) amounted to RUB 64.1bn. The CBR N1.0 capital adequacy ratio was 16.72%. Core Capital Adequacy Ratio (N1.1) was 10.45% and Main Capital Adequacy Ratio (N1.2) was 14.83%.

Our strong March 2018 RAS results are driven by two major continuing trends:

a) an ongoing quality growth of our consumer finance business;

b) a growing contribution from our non-credit fees-and-commission business lines.  

Note on RAS results

Please note that the figures in this press release are calculated in accordance with Tinkoff Bank's internal methodology which is available at:  

http://static.tinkoff.ru/documents/eng/investor-relations/ras-methodology.pdf

RAS results are not a reliable indicator of IFRS results due to significant accounting differences that make a direct read-across from RAS to IFRS results impossible. The main differences between RAS and IFRS are:

* Consolidated results under IFRS include a number of additional items and results of its subsidiaries

* Accrual of expenses under IFRS

* Timing differences in accounting for restructured loans ('instalments') and loans going through courts

* The effect from the revaluation of currency derivative instruments

* The effect of deferred income tax.

About Tinkoff Bank

Tinkoff is Russia's first and only direct bank with nearly 7 mln customers. The bank was founded in 2006 by the Russian entrepreneur Oleg Tinkov.

TCS Group Holding PLC, the bank's holding company, has been listed on the London Stock Exchange since October 2013. In addition to the bank the Group includes mobile virtual operator Tinkoff Mobile, Tinkoff Insurance, and Tinkoff Software DC, a network of development hubs across Russia.

With no retail branches, the bank serves its customers remotely via online channels and its call center, 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 bank offers both own brand and partner retail financial services via its Tinkoff.ru 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 February 2018, the bank was the second largest player in the Russian credit card market, with a market share of 11.7%. The 2017 IFRS net income of TCS Group Holding PLC amounted to RUB 19 bn, ROE grew to 52.8%.

Banki.ru, 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 2016 and 2015, 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. In 2016, Tinkoff Bank was named the Best Digital Bank in the CEE by Euromoney. Its mobile application was recognised as the best in Russia by Markswebb Rank & Report in 2014, 2015 and 2016, and by Deloitte for four years in a row in 2013-2016.

Tinkoff Bank is a General Partner of the St. Petersburg International Economic Forum (SPIEF) in 2018.

Tinkoff Bank is a member of the deposit insurance system (the system guarantees each depositor of member banks a payout of RUB 1.4 mln on deposits and current accounts, including interest income).