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TCS Group Holding PLC (TCS)
TCS Group Holding PLC Announces 2Q and 1H 2018 IFRS Results and 3rd 2018
Interim Dividend
29-Aug-2018 / 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 Announces 2Q and 1H 2018 IFRS Results and 3rd 2018
Interim Dividend
Limassol, Cyprus - 29 August 2018. TCS Group Holding PLC (TCS LI) (the
"Group"), Russia's leading provider of online retail financial and lifestyle
services via the Tinkoff.ru financial ecosystem, today announces its interim
condensed consolidated IFRS results for the six months ended 30 June 2018.
KEY FINANCIAL HIGHLIGHTS
2Q 2018
- Net margin up 28% y-o-y to RUB 14.2 bn (2Q17: RUB 11.1 bn)
- Profit before tax up 42% y-o-y to RUB 7.8 bn (2Q17: RUB 5.5 bn)
- Net income up 43% y-o-y to RUB 6.0 bn (2Q17: RUB 4.2 bn)
- ROE increased to 69.3% (2Q17: 48.6%)
- Net interest margin at 24.0% (2Q17: 26.0%)
- Cost of risk stood at 6.6% (2Q17: 6.0%)
1H 2018
- Net margin grew by 36% y-o-y to RUB 28.2 bn (1H17: RUB 20.8 bn)
- Profit before tax up 53% y-o-y to RUB 15.2 bn (1H17: RUB 9.9 bn)
- Net income up 55% y-o-y to RUB 11.7 bn (1H17: RUB 7.6 bn)
- ROE grew to 69.3% (1H17: 46.1%)
- Net interest margin at 24.7% (1H17: 25.7%)
All balance sheet numbers and ratios as of 30 June 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
numbers and ratios also reflect the transition to IFRS 9.
- Total assets increased by 11% to RUB 287.2 bn (1 Jan'18: RUB 259.3 bn)
- Gross loans and advances to customers up 14% to RUB 189.5 bn (1 Jan'18:
RUB 166.7 bn)
- Net loans and advances to customers up 17.3% to RUB 152.2 bn (1 Jan'18:
RUB 129.7 bn)
- Share of non-performing loans (NPLs) decreased to 12.1% (1 Jan'18:
13.4%)
- Customer accounts increased by 16% to RUB 207.7 bn (1 Jan'18: RUB 179.0
bn)
- Total equity increased by 8.1% to RUB 34.7 bn (1 Jan'18: RUB 32.1 bn)
KEY HIGHLIGHTS FOR 1H 2018
- In 1H18 over 735k new active credit card customers were acquired,
underpinning net loan growth of 17.3%
- In April, The Bank of Russia recognised Tinkoff Bank as a significant
credit institution in the payment services market and added it to the
relevant register now numbering 36 financial institutions
- 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, 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
- Tinkoff Bank was a general partner of the St. Petersburg International
Economic Forum (SPIEF), which took place in St. Petersburg, Russia on
24-26 May
- In May, Tinkoff Bank and the Talent and Success Foundation signed an
agreement to launch a development hub at Sirius educational center in
Sochi and to cooperate in a number of areas, including joint R&D projects
and working towards a better regulatory framework to support innovation
- In May, Tinkoff Bank and SME Bank signed a cooperation agreement for
Tinkoff Bank to become SME Bank's agent for transaction support services
with regard to the partner's SME lending programmes
- Tinkoff Bank uses robotic process automation for all customer
communication channels
KEY HIGHLIGHTS POST 1H 2018
- Tinkoff Bank's market share stood at 11.7% as of 1 August 2018,
solidifying its position as Russia's second largest credit card issuer
- In July, Tinkoff acquired a stake in Kassir.ru, Russia's top online
ticketing provider, in a move to further develop its ecosystem to offer
customers a greater choice of lifestyle and entertainment services through
the Tinkoff.ru platform
- In July, Tinkoff and Sberbank launched joint P2P money transfers using
just a mobile phone number
- In July, Tinkoff Bank replaced a vendor's voice-recognition system with
its proprietary solution, cutting average customer authentication time by
50%
- In July, Tinkoff Investments launched a robo-advisor service for
investment portfolio management
- Tinkoff Mobile, the Group's MVNO, announced a major expansion drive into
Russia's regions with an aim to have operations in over 60 Russian regions
by the end of 2018
- In August, Tinkoff Business launched its own small business lending
solution deploying its own balance sheet
- 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.
THIRD 2018 INTERIM DIVIDEND ANNOUNCEMENT
In line with the Group's dividend policy, on 27 August the Group's Board of
Directors approved a third 2018 interim gross cash dividend of USD 0.24 per
share/per GDR (with each GDR representing one class A share) with a total
amount allocated for dividend payment for Q2 of around USD 43,932,295.00.
Subject to London Stock Exchange regulations, indicatively the dividend will
be payable on 24 September 2018 to those shareholders on the register as at
the record date of 14 September 2018. The ex-dividend date will be 13
September 2018.
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.
GUIDANCE FOR 2018 REAFFIRMED
Following strong underlying growth year to date in 2018, the Group is
pleased to reaffirm its FY18 performance guidance:
- net income to be at least RUB 24 bn;
- net loan growth to be at least 25%;
- cost of risk around 7% on IFRS 9 basis;
- cost of borrowing to be around 6-7%
Oliver Hughes, CEO of Tinkoff Bank, commented:
"The Group delivered good results in the first half of 2018, with RUB 11.7
billion in net income underpinned by three major elements of our business
model: consumer lending, fee and commissions income and lifestyle services.
Our ROE grew to 69.3% during the period, reaffirming our position as one of
the most profitable banks globally.
"Our core credit card business has continued to demonstrate robust growth,
delivering 38% growth in transaction volumes in 1H 2018 and attracting
735,000 new customers. At the same time, we have been successful in
delivering our diversification strategy, with non-credit businesses now
accounting for 30% of our top line results.
"Tinkoff SME has reached new heights in 2018 with over 340,000 accounts
opened by the end of 1H18. In August we scaled up this business and launched
our own lending solution. Tinkoff Mortgage remains Russia's only fully
online mortgage marketplace and continues to thrive as declining mortgage
rates have driven market growth via our 11 partner banks, for whom we are
originating over RUB 2bn mortgages per month. After receiving a professional
securities market participant license from the CBR in March, we re-launched
our ground-breaking Tinkoff Investments platform. Our new independent
brokerage platform has captured a 25% market share of new accounts.
"In July, we made an important acquisition by purchasing a stake in
Kassir.ru, Russia's leading and a fast-growing online ticket seller. By
integrating Kassir.ru into our Tinkoff ecosystem, we are able to provide our
customers with a range of services beyond financial and insurance products,
and attract new users to our ecosystem. This, together with our integrations
with Booking.com and Afisha Restaurants, will form a key part of our
lifestyle banking value proposition.
In line with our dividend policy, the Board approved a third 2018 interim
dividend of USD 0.24 per share."
FINANCIAL AND OPERATING REVIEW
RUB bn 2Q18 2Q17 Change 1H18 1H17 Change
Credit cards issued ('000 500 570 (12%) 1,020 1,020 -
pcs)
Credit card 86.7 64.9 34% 165.3 119.4 38%
transactions
Net margin 14.2 11.1 28% 28.2 20.8 36%
Net margin after credit loss 11.1 9.0 23% 21.9 16.4 33%
allowance
Profit before tax 7.8 5.5 42% 15.2 9.9 53%
Net income 6.0 4.2 43% 11.7 7.6 55%
RUB bn 30 June 1 Jan 2018 Change
2018
Total Assets 287.2 259.3 10.8%
Net loans and advances to customers 152.2 129.7 17.3%
Cash and treasury portfolio 104.9 96.3 8.8%
Total Liabilities 252.4 227.1 11.1%
Customer accounts 207.7 179.0 16%
Total Equity 34.7 32.1 8.1%
Tier 1 capital ratio 16.5% 17.7% (1.2pp)
Total capital ratio 16.5% 17.8% (1.3pp)
CBR N1.0 (capital adequacy ratio) 16.4% 16.3% 0.1pp
The Group delivered another strong set of results for 1H18 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 in 2Q18 and 1H18 of RUB 6.0 bn
and RUB 11.7 bn, respectively. This translated into ROE of 69.3% both for
2Q18 and for 1H18.
In 1H18, the Group issued 1,020k credit cards, including 500k in 2Q18. The
total
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