TCS Group Holding PLC IFRS results...August 2019 TCS Group Holding PLC 2Q&1H'19 IFRS results 3 Asset...

TCS Group Holding PLC IFRS results2Q & 1H’19

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Certain statements and/or other information included in this document may not be historical facts and may

constitute “forward looking statements” within the meaning of Section 27A of the U.S. Securities Act and

Section 2(1)(e) of the U.S. Securities Exchange Act of 1934, as amended. The words “believe”, “expect”,

“anticipate”, “intend”, “estimate”, “plans”, “forecast”, “project”, “will”, “may”, “should” and similar expressions

may identify forward looking statements but are not the exclusive means of identifying such statements.

Forward looking statements include statements concerning our plans, expectations, projections, objectives,

targets, goals, strategies, future events, future revenues, operations or performance, capital expenditures,

financing needs, our plans or intentions relating to the expansion or contraction of our business as well as

specific acquisitions and dispositions, our competitive strengths and weaknesses, our plans or goals relating to

forecasted production, reserves, financial position and future operations and development, our business

strategy and the trends we anticipate in the industry and the political, economic, social and legal environment

in which we operate, and other information that is not historical information, together with the assumptions

underlying these forward looking statements. By their very nature, forward looking statements involve inherent

risks, uncertainties and other important factors that could cause our actual results, performance or

achievements to be materially different from results, performance or achievements expressed or implied by

such forward-looking statements. Such forward-looking statements are based on numerous assumptions

regarding our present and future business strategies and the political, economic, social and legal environment

in which we will operate in the future. We do not make any representation, warranty or prediction that the

results anticipated by such forward-looking statements will be achieved, and such forward-looking statements

represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or

standard scenario. We expressly disclaim any obligation or undertaking to update any forward-looking

statements to reflect actual results, changes in assumptions or in any other factors affecting such statements.

August 2019 TCS Group Holding PLC 2Q&1H'19 IFRS results 2

Summary of 2Q and 1H’19 performance

Credit business: growth

through product diversification

Growth

• +2.2mn new credit accounts acquired in 1H’19

• +46% net loan growth

Solid portfolio performance

• Annualized CoR at 8.9% in 2Q’19, reflecting the front-loaded impact of IFRS 9 on a rapidly growing loan book

• NPLs (90d+) at 7.4% with coverage at 1.73x

Product diversification

• Non-credit card products accounted for 36% of loan book

Transactional & Servicing business lines:

growth of customer base

Growth

• In 1H’19, Current Accounts customers up 26% to 5.7mn; and Investments customers up 91% to 593k

Important revenue driver

• 31% of total revenue coming from non-credit business lines in 1H’19

Superior profitability & capital position

• Net profit of ₽8.2bn in 2Q’19 and ₽15.4bn in 1H’19

• Annualized quarterly ROE at 64.7%

• Solid capital base: Basel III Tier 1 capital ratio up to 14.2%

• Launched a $300m capital raise (successfully completed on 3 July 2019)

Strong business development effort

• Tinkoff increased its stake in CloudPayments to 90%

• In June, we introduced the world’s first voice assistant for financial and lifestyle tasks called Oleg

• Tinkoff announces the Tinkoff Travel digital platform relaunch and the creation of its own online travel agency

• Launch of Tinkoff Capital, an Asset Management platform for retail customers, which at the initial stage will offer Tinkoff’s own ETFs

• In July, Tinkoff started offering for sale to third parties the Tinkoff VoiceKit, a set of proprietary speech-to-text and text-to-speech technologies

TCS Group Holding PLC 2Q&1H'19 IFRS results 3August 2019

Asset growth dynamics

Group’s total assets grew by 10.6% in

2Q’19 driven by accelerated growth of

net loan portfolio

All currency data are in ₽ bn unless otherwise stated

ASSETS ASSETS STRUCTURE

Quarterly net loan portfolio growth

amounted to ₽49.2bn or 20.4%

Investments in debt securities slightly

decreased due to reduced need for repo

transactions


30.0 33.8 41.9 41.4 43.8

152.2168.7

198.5241.1

290.3

85.995.5

101.3

95.2

94.2

19.0

24.0

33.8

31.2

23.8

287.2

322.0

375.5

408.9

452.1

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Cash and cash equivalents Investments in debt securities Net loans Other

10% 11% 11% 10% 10%

53% 52% 53% 59% 64%

30% 30% 27%23%

21%

7% 7% 9% 8% 5%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Cash and cash equivalents Investments in debt securities Net loans Other

+57.4%

+10.6%

Credit business: product diversification & strong portfolio growth

GROSS LOANS NET LOANS BREAKDOWN

Net portfolio has grown by 46.3% YTD

Net loans grew by 90.7% y-o-y

The share of non-credit card loans grew to 36% as of 30-Jun-19

Lower-CoR type of lending continues to push NPL down to 7.4%,

while the coverage ratio remains stably high at 1.7x due to

frontloading effect for new loans for IFRS 9 standard


NPLs


IFRS 9

152.2168.7

198.5

241.1

290.3

37.336.8

36.2

38.6

42.8

189.5205.4

234.7

279.7

333.0

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Net loans LLP

3.7% 3.1% 2.9% 2.7% 2.8%

8.4%7.7% 6.6% 5.4% 4.6%

12.1%10.8%

9.4%8.1% 7.4%

163% 166% 164% 171% 173%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Courts Non-courts LLP/NPL

+75.8%+19.1%

85% 80%73% 68% 64%

10%13%

17%18%

19%

4% 5% 7%7%

6%6%4%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

SME loans

Car loans

Secured loans

POS loans

Cash loans

Credit cards

Gross loan portfolio quality – IFRS 9

Current

Monitor

Sub-standard

NPL

provisioning rate


August 2019 TCS Group Holding PLC 2Q&1H'19 IFRS results

Stage

NPL dropped to 7.4%

Provisioning rates for all stages notched down due to the better portfolio

quality

Current: non-overdue portfolio with low expected credit risk

Monitor: 1-30 days overdue or without first due date

Sub-standard: 31-90 days overdue, includes restructured loans

NPL: 90+ days overdue

6

82.1%

3.5%

1.8%

31-Mar-19

1 2 3

(4.8%) (55%) (73%)

1.4%

1.2%

1.8%

8.1%

81.4%

3.2%

2.1%

31-Dec-18

1 2 3

(5.4%) (59%) (75%)

1.1%

1.1%

1.6%

9.4%

83.0%

3.1%

1.6%

30-Jun-19

1 2 3

(4.5%) (52%) (72%)

1.5%

1.3%

2.0%

7.4%

4.20.9

2.4

10.0

18.9

4Q'19 1Q'20 … 2Q'21 … 1Q'22 … 3Q'22

ECP

Tier 1 Perpetual

Local bonds

Current accounts and term deposits of both retail and corporate

sectors remain stable despite negative seasonal effect

Funding: customer inflows remain strong

84.8 94.6 100.2 108.4 119.5

92.7104.3

137.6 134.7

154.830.2

34.7

43.1 38.7

40.7

18.7

19.5

20.6 19.3

18.8

10.6

10.9

9.6 10.3

17.724.5

20.5

237.2

264.8

313.9335.9

372.0

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Retail Deposits Retail Cur.Acct. Legal entities

Subordinated debt Debt securities in issue Due to banks (inc. Repo)

183.5 203.5243.9 238.6 268.1

24.230.1

37.1 43.147.0

88% 88% 88% 87% 87%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

FX

RUB

% of retail accountscovered by DIA

Call option

FUNDING CUSTOMER ACCOUNTS

WHOLESALE DEBT MATURITY PROFILE



FX position hedged on a long-term basis through a combination of

natural hedge and long-dated currency swaps

Upgraded by Moody’s to Ba3/Stable

Placed a 3-year ₽10bn local bond at 9.25% in April 2019

7

+10.8%+56.9%

Put option Put option Put option

11.4%10.3%

9.4% 9.5%

7.7%

16.0%14.4%

13.2% 12.7%

10.4%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

N1.1 N1.2

16.4%15.1%

13.9% 13.0%11.1%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Equity: more capital allocated to seize loan growth opportunity

34.737.6

42.3

46.9

54.5

16.5% 16.6%14.9%

14.0% 14.2%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Equity Basel III Tier 1 / Total CAR

SHAREHOLDERS’ EQUITY N1.0 CAPITAL RATIO (STATUTORY)

N1.1, N1.2 CAPITAL RATIOS (STATUTORY)

A moderate decrease of the capital ratios results from a combination of factors:

Rapid growth of the loan book coupled with the frontloading impact of IFRS 9

Pressure from new, more stringent, RWA rules affects statutory capital ratios

1Q’19 interim dividend paid in Q2

N1.0 min 9.9%

N1.2 min 7.9%N1.1 min 6.4%



+16.1%+56.9%

To secure additional capital required to seize the Credit portfolio growth

we have taken several steps:

Completed a $300m capital raise through a follow-on offering

Suspended dividend payments for the rest of 2019

The positive impact of the capital raise will be partially reflected in our Q3 statutory accounts subject to the Central Bank of Russia capital registration process

18.4 19.1 20.7 23.127.9

5.16.2

7.36.7

7.4

1.51.8

1.91.9

1.7

1.42.0

2.12.3

2.9

26.429.0

32.033.9

40.0

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit F&C business Treasury Insurance premiums

Revenue: a good balance between Credit and F&C business lines

REVENUE REVENUE STRUCTURE

In 1H’19, group total revenue grew by 43% y-o-y, while revenue from F&C

business increased by 51%

Transactional and servicing business lines generated more than 30% of

revenue despite rapid growth of the credit business two quarters in a row

Current focus on attracting new credit customers leads to an increase in

variable acquisition costs which so far do not allow net F&C income to

cover most of total expenses



NET F&C INCOME / OPEX

70% 66% 65% 68% 70%

19%21% 23% 20% 18%

6% 6% 6% 5% 4%

5% 7% 7% 7% 7%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit F&C business Treasury Insurance premiums

45% 48% 47% 40% 38%

69% 72% 75%69% 69%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Net F&C income / Total expenses Net F&C income / Admin expenses

+51%

36.7

51.0

9.3

14.1

3.0

3.6

2.6

5.3

51.6

73.9

1H'18 1H'19

71% 69%

18% 19%

6% 5%

5% 7%

1H'18 1H'19

+43%

36.1% 35.0% 34.1% 32.6% 33.5%

6.8% 7.1% 7.4% 7.1% 6.9%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit portfolio Investment portfolio

2.8 3.1 3.5 3.54.2

0.80.7

0.8 0.9

1.23.6 3.84.3 4.3

5.4

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Customer accounts Wholesale / interbank

16.5 17.3 18.7 20.925.6

1.5 1.8 2.01.9

1.818.0 19.0 20.7 22.8

27.4

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit portfolio Treasury

Interest income and expense

YIELD

INTEREST EXPENSE COST OF BORROWING

Increase of interest income in 2Q’19 due to change of deferral methodology,

which let us to delay all salary costs directly correlated with customer

acquisition

Increase of interest expense and, accordingly, cost of funding caused

by review of salary costs directly related to customer acquisition so

that they can be considered as a part of effective interest rate

This effect of the retrospective change in approach was fully taken

into account in the second quarter

10

INTEREST INCOME


5.7% 5.7% 5.5%4.9%

5.6%

10.1%9.1% 9.4%

7.9% 8.4%

6.3% 6.1% 5.9%5.3%

6.1%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Customer accounts Wholesale Blended


+52%

+50%

32.846.6

3.0

3.735.7

50.3

1H'18 1H'19

+41%

5.47.6

1.6

2.07.0

9.7

1H'18 1H'19

+38%

36.9%33.0%

6.9% 7.0%

1H'18 1H'19

5.7% 5.2%

9.8%

8.5%

6.3%5.7%

1H'18 1H'19

24.0% 23.0% 21.8% 21.5% 23.1%

18.8% 18.2% 18.6%15.8% 16.0%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Net interest margin (NIM) Risk-adjusted NIM

3.0 3.12.3

4.9

6.8

6.6% 6.2%4.2%

7.5%8.9%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Provision for loan impairment Cost of risk

14.2 14.9 16.118.1

21.6

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit business: Net interest income and cost of risk

NET INTEREST MARGIN

COST OF RISK WRITE-OFFS / SALE OF BAD DEBTS

11


NET INTEREST INCOME

3.94.7 4.2

3.5 3.6

8.6% 9.6% 7.7%5.5% 4.7%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Write-offs Sale of bad debts % of gross loans (annualized)


CoR has ticked up to 8.9% reflecting a combination of 1H’19 loan growth and

the impact of IFRS 9 standard: new loan provisions that are front-loaded

Also current volatility in CoR is due to continued fine-tuning of new loan

origination and distribution and test-and-learn approach

+52%

Solid loan book growth and low risks drive growth of Net Interest

income

28.2

39.7

1H'18 1H'19

+41%

24.7%22.4%

19.2%15.9%

1H'18 1H'19

6.2

11.7

7.0%8.2%

1H'18 1H'19

8.8

7.1

9.9%

5.1%

1H'18 1H'19

0.6 0.7 0.7 0.81.0

0.9

1.31.4

1.5

2.0

1.4

2.02.1

2.3

2.9

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Auto Other

1.9 1.8 1.9 2.1 2.2

1.8 2.12.4 2.0 2.2

1.41.7

2.11.7

1.91.0

1.0

1.41.5

1.6

0.3

0.4

0.60.4

0.7

6.3

7.0

8.37.8

8.6

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Credit-related SME Debit cards Merchant acquiring Other

Transactional & Servicing business:Customer growth prioritized

FEE AND COMMISSION INCOME INSURANCE PREMIUMS EARNED

36% y-o-y growth of F&C income is mainly driven by non credit-

related business

We continue to prioritize customer base growth

Tinkoff Insurance doubled its income

In 2Q’19 auto-insurance showed 27% growth of net premiums

earned

12



+36% 2.0x

4.0 4.3

3.14.3

2.7

3.61.8

3.1

0.6

1.1

12.1

16.3

1H'18 1H'19

+35%

1.0

1.8

1.6

3.5

2.6

5.3

1H'18 1H'19

2.0x

0.5 0.7 0.90.5 0.7

0.20.3

0.3

0.40.40.2

0.20.2

0.20.20.2

0.2

0.30.3

0.3

0.3

0.4

0.30.31.4

1.7

2.1

1.71.9

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Interchange FX Cash withdrawal SMS Other

Transactional business: Current accounts

CUSTOMERS (m)

We see our current accounts business as the cornerstone of our customer

relationship

5.7 million current accounts customers drive the Tinkoff ecosystem by

using services such us restaurants, cinema tickets and concert, and event

booking, voice recognition and smart in-chat assistant

Our award-winning mobile and internet bank applications ensure

best-in-class customer experience

We continue to prioritize customer base growth

13

DEBIT CARDS TRANSACTIONS VOLUME FEE AND COMMISSION INCOME


92.7 104.3

137.6 134.7154.8

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

236276

335 334395

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19


+39%

BALANCES

3.54.0

4.55.1

5.7

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

1.21.5 1.7

1.4 1.6

0.6

0.60.7

0.70.6

1.82.1

2.42.0

2.2

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Transaction Service

Transactional business: SME

CUSTOMERS (‘000)

Steady development of our SME business line, which

shows great financial result over the past few years,

despite the mounting regulatory pressure

We continue offering attractive terms and expanding the range of

services for SME customers to support the customer base growth

14

FEE AND COMMISSION INCOME


341388 425 454 484

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

28.833.2

41.737.6 39.7

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19


+26%

BALANCES

Transactional business: Investments

CUSTOMERS (‘000) BALANCES

We continue to attract new customers and increase volume of deals

44% of new retail account at MOEX opened through Tinkoff

Investments in 1H’19 according to opened MOEX statistics*

As we acquire more frequent traders who generate high volume of

low-fee trades, our F&C revenue growth momentum is building up

New instruments such as margin trading and short sale are to

increase F&C income

15

TRANSACTION VOLUMES FEE AND COMMISSION INCOME (₽m)



116 157

310

451

593

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

10.514.2

17.2

24.2

30.1

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

24.3

50.1

77.3

101.5116.6

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

44

6990

122

149

0.18% 0.14% 0.12% 0.12% 0.13%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Avg. transaction fee rate

* Estimation based on number of opened accounts https://www.moex.com/s719

Operating expenses

STRUCTURE OF OPERATING EXPENSES* OPERATING EFFICIENCY**

* Administrative and other operating expenses + customer acquisition expenses.** Income is stated as operating income that includes net interest income, net fee and commission income, insurance premiums earned and other operating income. Cost is stated as client acquisition expenses plus administrative and other operating expenses.

Operating expenses grows mainly due to accelerated growth of new

customers acquisition costs

Cost-efficiency is one of the differentiating features of the Tinkoff

model: we successfully balance rapid growth of business with

moderate expenses to lower cost to income ratio

16


3.9 4.0 4.1 4.6 4.5

1.2 1.4 1.61.7 1.5

1.71.8

2.4 1.8 2.11.8

1.6

2.43.0

3.88.6 8.8

10.411.1

12.0

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

Administrative staff Acquisition staff Other administrative Other acquisition

42.8%

40.1%

43.5% 42.9%

39.7%

27.8%26.5% 26.9%

24.8%

22.0%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

C/I (incl. acquisition) C/I (excl. acquisition)


+39%

7.59.1

2.5

3.23.2

4.03.6

6.816.9

23.1

1H'18 1H'19

+36%

42.7%41.1%

27.1%

23.3%

1H'18 1H'19

Net income: strong Q2 quarterly results

NET INCOME RETURN ON ASSETS

RETURN ON EQUITY

Record-high quarterly net income of ₽8.2bn

Net income up by 36% y-o-y in line with long-term trend

ROE is adjusting back to our long-term trend

17


6.0

7.3

8.1

7.2

8.2

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

8.7%9.6% 9.3%

7.3% 7.6%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

69.3%

80.4% 81.2%

64.4% 64.7%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19


+36%

11.7

15.4

1H'18 1H'19

+31%

8.7%7.5%

1H'18 1H'19

69.3%64.3%

1H'18 1H'19

FY2019 guidance

18August 2019 TCS Group Holding PLC 2Q&1H'19 IFRS results

FY2019as of 1Q’19

FY2019updated

Net loan portfolio growth 40%+ 60%+

Cost of Risk 6-7% 7-8%

Cost of Borrowing 6-7% 6-7%

Net profit ₽35bn+ ₽35bn+

Appendix

Customer Profile

TCS Group Holding PLC 2Q&1H'19 IFRS resultsAugust 2019

Platinum Credit CardMoscow & St. Petersburg: 26%

Max other region: 5%Monthly income (₽k): 51

Age: 38

Tinkoff BlackMoscow & St. Petersburg: 48%


Age: 34

Black EditionMoscow & St. Petersburg: 51%


Age: 35

PlatinumCredit Cards

TinkoffAllAirlines

Tinkoff BlackTinkoff

InvestmentsHome Equity Loans

AutoLoans

Black EditionCustomers

Gender (M/F) 49% / 51% 57% / 43% 59% / 41% 81% / 19% 55% / 45% 80% / 20% 72% / 28%

Average age 38 35 34 32 40 38 35

Monthly income (₽k) 51 109 83 102 114 81 185

Moscow and Moscow Region 18% 46% 36% 38% 24% 19% 41%

Saint-Petersburg and Leningradskaya oblast’

8% 12% 13% 12% 10% 8% 10%

Every other region <5% <3% <3% <3% <5% <5% <6%

M FM F

M F

20

Credit card market: steady growth while consolidating


* Consumer finance specialists include OTP Bank, Binbank credit cards, HCF Bank, Orient Express Bank, Credit Europe Bank, MTS Bank, Trust, Renaissance Credit, Sovcombank and Russian Standard BankSource: Bank’s analytics based on CBR 101 form

RUSSIAN CREDIT CARD MARKET

All currency data are in RUB bn unless otherwise stated

RETAIL LOANS UP TO 3 YEARS

22.1%24.9%

32.0% 37.4% 42.8% 45.5% 44.8% 44.9%

7.1%

7.3%

6.4% 7.9% 10.3%11.6%

11.8%13.0%

4.6%

5.6%

6.8% 6.7% 7.3%

8.3%

11.1%

10.5%

7.7%

6.8%

7.2% 8.6% 9.6%

8.3%

7.2%

7.0%

35.5%

33.0%

26.3% 19.9% 17.3%

15.2%

15.5%

15.6%

23.0%

22.5%

21.1%19.5%

12.7%

11.1%

9.6%

9.0%

675

1,015

1,198

1,087 999

1,122

1,313

1,495

2012 2013 2014 2015 2016 2017 2018 1-Jul-19

Other banks

Other consumer banks

VTB Bank

Alfa-Bank

Tinkoff Bank

Sberbank

21.3% 22.6% 26.0% 29.1% 32.3% 34.3% 36.5% 37.2%5.4%6.1%

5.9% 7.5% 9.0%8.2%

7.0%7.8%

2.3%2.9%

3.0% 3.9%4.9%

5.6%6.4%

7.2%

4.4%

4.8%5.6% 5.5%

5.6%6.3%

7.2%

6.7%

26.4%

25.5% 22.3%18.8% 17.1%

16.5%

16.3%

15.8%

40.2%

38.0% 37.1%

35.2% 31.2%

29.2%

26.6%

25.3%

2,168

2,653 2,650

2,172 2,120

2,427

2,754

3,091

2012 2013 2014 2015 2016 2017 2018 1-Jul-19

Other banks

Other consumer banks

Alfa-Bank

Tinkoff Bank

VTB Bank

Sberbank

Credit products

SME

RetailBrokerage

Mobile andpayments

Acquiring

Insurance

MVNO

Travel

Cinema tickets

Concerts &Events

Taxi

Restaurants

Tinkoff.ru –A digital financial ecosystem built around customer needs


Tinkoff ID: customer’s key for Tinkoff.ru

Customer lands on mobile app or portal

Tinkoff Black Current accounts

Partnerproducts

Proprietaryproducts

-30%

0%

30%

60%

90%

120%

150%

0

50

100

150

200

250

300

350

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2011 2012 2013 2014 2015 2016 2017 2018 2019

RU

B b

n

Loans and advances to retail customers LTM Tinkoff portfolio growth, rs LTM market* growth, rs

Long-term perspective – growth

TCS Group Holding PLC 2Q&1H'19 IFRS resultsAugust 2019 23

• Russian consumer finance crisis

• Macro weakness

• Low oil prices

• Geopolitics

* Market estimated as non-overdue portfolio from RAS reporting 101 form 455% and 457% accounts, including only loans with term up to 3 years

0%

20%

40%

60%

80%

100%

120%

140%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0


2011 2012 2013 2014 2015 2016 2017 2018 2019

RU

B b

n

Profit (quarterly) ROE, rs

Long-term perspective – profitability



• Macro weakness

• Low oil prices

• Geopolitics

0%

5%

10%

15%

20%

25%


2011 2012 2013 2014 2015 2016 2017 2018 2019

Cost of risk Average through the cycle


Long-term perspective – cost of risk


• Macro weakness

• Low oil prices

• Geopolitics

25

Introduction if IFRS9 and frontloading of provisions

Issue in lombard83%

Issue not in lombard17%

Financial 19%

Energy19%

Basic Materials

9%

Consumer, Non-cyclical1%

Government31%

Industrial12%

Utilities4%

Communications 4%

RUB69%

FX31%

0-116%

1-334%

3-538%

5+12%

Structure of the treasury portfolio

Note: management estimates, unaudited

BY RATING BY DURATION BY CURRENCY

IN CBR LOMBARD BY SECTOR


>=BBB-78%

BB+13%

BB6%

BB-2%

Other2%

Key financial results

Income Statement 2Q’19 1Q’19 Change 1H’19 1H’18 Change

Interest income 27.4 22.8 20% 50.3 35.7 41%

Net margin 21.6 18.1 20% 39.7 28.2 41%

Provision charge for loan impairment 6.8 4.9 40% 11.7 6.2 87%

Customer acquisition expense 5.3 4.7 14% 10.0 6.2 62%

Administrative and other operating expenses 6.7 6.4 4% 13.1 10.7 22%

Profit before tax 10.4 9.3 13% 19.7 15.2 30%

Profit for the period 8.2 7.2 14% 15.4 11.7 31%

Balance Sheet 30-Jun-19 31-Mar-19 Change 30-Jun-18 Change

Cash and treasury portfolio 117.9 126.4 -7% 104.9 12%

Loans and advances to customers 290.3 241.1 20% 152.2 91%

Total assets 452.1 408.9 11% 287.2 57%

Customer accounts 315.0 281.8 12% 207.7 52%

Total liabilities 397.6 361.9 10% 252.4 57%

Total equity 54.5 46.9 16% 34.7 57%

Ratios 2Q’19 1Q’19 Change 1H’19 1H’18 Change

ROAE 64.7% 64.4% 0.3 p.p. 64.3% 69.3% -5.1 p.p.

ROAA 7.6% 7.3% 0.3 p.p. 7.5% 8.7% -1.2 p.p.

Net interest margin 23.1% 21.5% 1.6 p.p. 22.4% 24.7% -2.4 p.p.

Cost/Income (incl. acquisition expenses) 39.7% 42.9% -3.2 p.p. 41.1% 42.7% -1.5 p.p.

Cost of risk 8.9% 7.5% 1.3 p.p. 8.2% 7.0% 1.2 p.p.

27



Regulatory environment


% (PSK)range

RWs since

Jan-14 Mar-17 May-18 Sep-18 Apr-19

10-15% 100% 100% 100% 120% 150%

15-20% 100% 100% 110% 140% 170%

20-25% 100% 110% 120% 170% 200%

25-30% 110% 140% 140% 200% 230%

30-35% 110% 300% 300% 300% 300%

35-45% 140% 600% 600% 600% 600%

45-60% 300% 600% 600% 600% 600%

>60% 600% 600% 600% 600% 600%

Jan-19 Apr-19 Jul-19 Oct-19 Jan-20

Minimum base core Tier 1 ratioCapital conservation bufferTotal min core Tier 1 for all banks N1.1

4.500%1.875%

6.375%

4.500%2.000%

6.500%

4.500%2.125%

6.625%

4.500%2.250%

6.750%

4.500%2.500%

7.000%

SIFI* bufferTotal min core Tier 1 for SIFI* N1.1

0.650%7.025%

0.650%7.150%

0.650%7.275%

0.650%7.400%

1.000%8.000%

Additional Tier 1 ratio Total min Tier 1 (non-SIFI)Total min Tier 1 for SIFI*

N1.2

1.500%7.875%8.525%

1.500%8.000%8.650%

1.500%8.125%8.775%

1.500%8.250%8.900%

1.500%8.500%9.500%

Tier 2 ratioTotal min CAR (non-SIFI)Total min CAR for SIFI*

N1.02.000%

9.875%10.525%

2.000%10.000%10.650%

2.000%10.125%10.775%

2.000%10.250%10.900%

2.000%10.500%11.500%

* SIFI means Systemically Important Financial Institution

Historical RWs increase for unsecured retail lending

% (PSK)range

PTI Range

0-30%30-

40%40-

50%50-

60%60-

70%70-

80%80%+

0-10% 130% 130% 130% 160% 170% 190% 210%

10-15% 150% 150% 150% 170% 180% 200% 220%

15-20% 170% 170% 170% 210% 230% 240% 260%

20-25% 200% 200% 200% 250% 270% 280% 300%

25-30% 230% 230% 230% 280% 290% 300% 320%

Proposed RW based on PTI and PSK

Basel III capital requirements

Secured loans 100% 100% 100% 100% 100%

28

Tinkoff Investor Relations

Larisa Chernysheva

[email protected]

https://www.tinkoff.ru/eng/ir/financials/presentations/

mailto:[email protected]

https://www.tinkoff.ru/eng/ir/financials/presentations/

TCS Group Holding PLC IFRS results...August 2019 TCS Group Holding PLC 2Q&1H'19 IFRS results 3 Asset...

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