MOSCOW — 16 May 2024. International public joint stock company TCS Holding (MOEX: TCSG) («TCS», the «Group», the «Company», «Tinkoff»), a leading provider of financial and lifestyle services via its digital ecosystem, today announces its consolidated IFRS results for the three months ended 31 March 2024.

• Total revenues increased 66% to RUB 165.8 bn in 1Q’24 (1Q’23: RUB 99.9 bn)
• Net profit was RUB 22.3 bn in 1Q’24 (1Q’23: RUB 16.2 bn)
• Total customers rose 28% to 41.9 mn in 1Q’24 (1Q’23: 32.8 mn)
• ROE was 31.7% in 1Q’24 (1Q’23: 30.5%)

Stanislav Bliznyuk, CEO of Tinkoff Group, said:

«In 2024, Tinkoff Group continued its successful development with a focus on high-quality business growth in key segments and expansion of its loyal customer base. In the first quarter of 2024, the Group set historical records in terms of its key performance indicators: number of customers, size of its loan portfolio (RUB 1,251 bn), volume of customer term deposits (RUB 808 bn), and net interest income (RUB 73.2 bn). The Group also increased its return on equity to 31.7%.

The Group continues to invest significant resources in innovation, enhancing its own technologies in the field of world-class AI development at the Tinkoff Research laboratory. In 2024 alone, two scientific discoveries from the laboratory were presented at one of the most influential international conferences, the International Conference on Machine Learning. In just two last years the number of scientific discoveries has reached 20.

This year, we have focused even more on developing our loyal customer base and on how reliable our customers perceive our ecosystem to be. We continue to build a highly advanced financial platform based on artificial intelligence, and we are actively investing in algorithms to protect customers from various fraud risks, creating the most secure financial service in the market.

This is already reflected in the numbers: our retail customer funds have grown by 63% year-on-year and by 11% compared with the previous quarter, reaching RUB 1.6 trillion. With the inclusion of assets under custody at Tinkoff Investments, this figure has reached RUB 2.6 trillion.

In May, the Group’s shareholders, at the general meeting, supported the integration of Rosbank PJSC into TCS Holding IPJSC. We express our gratitude to the shareholders for supporting our strategic initiatives — the foundation for the future accelerated growth of the Group’s business, achieving significant synergies from economies of scale, and building competencies in complementary business segments."

KEY PERFORMANCE METRICS

	1Q’24	4Q’23	1Q’24	Q-o-Q Change, %	Y-o-Y Change, %
Total customers	41.9	40.4	32.8	4%	28%
Active customers	29.0	27.9	22.8	4%	27%
Monthly active users (MAU)	29.1	28.2	24.0	3%	21%
Daily active users (DAU)	13.2	12.7	10.2	4%	30%

FINANCIAL AND OPERATING REVIEW

RUB bn	1Q’24	1Q’23	∆	4Q’23	∆
Interest income	113.5	60.2	89%	93.8	21%
Interest expense	-38.3	-12.1	х3.2	-24.0	59%
Net interest income	73.2	46.9	56%	68.1	7%
Net interest income after provisions	52.0	34.6	50%	54.9	-5%
Fee and commission income	34.2	26.7	28%	37.0	-7%
Fee and commission expense	-15.9	-10.3	55%	-15.8	1%
Net fee and commission income	18.3	16.4	12%	21.2	-13%
Total operating expenses	-55.0	-40.5	36%	-57.2	-4%
Profit before tax	28.2	20.9	35%	27.3	3%
Net profit	22.3	16.2	37%	20.7	8%

Ratios	1Q’24	1Q’23	∆	4Q’23	∆
Return on equity	31.7%	30.5%	1.2 p.p.	30.4%	1.3 p.p.
Net interest margin	14.5%	13.6%	0.9 p.p.	15.4%	0.9 p.p.
Cost of risk	7.6%	7.0%	0.6 p.p.	5.9%	1.6 p.p.

RUB bn	31 Mar 2024	31 Dec 2023	∆	31 Mar 2023	∆
Total assets	2,438	2,270	7%	1,676	45%
Net loans and advances to customers	1,088	972	12%	682	60%
Cash and treasury portfolio	673	724	-7%	515	31%
Total liabilities	2,159	1,986	9%	1,456	48%
Customer accounts	1,860	1,713	9%	1,275	46%
Total equity	279	284	-2%	219	27%

Ratios	31 Mar 2024	31 Dec 2023	∆	31 Mar 2023	∆
Share of NPLs	9.2%	9.5%	-0.3 p.p.	11.4%	-2.2 p.p.
Tier I capital ratio	15.2%	16.9%	-1.7 p.p.	18.0%	-2.8 p.p.
Total capital ratio	15.2%	16.9%	-1.7 p.p.	18.0%	-2.8 p.p.

In 1Q’24, the Group’s total revenue grew by 66% year-on-year to RUB 165.8 bn (1Q’23: RUB 99.9). Gross interest income increased by 89% year-on-year to RUB 113.5 bn (1Q’23: RUB 60.2 bn), driven by significant growth in the customer base.

Gross yield on the loan portfolio reached 27.3% in 1Q’24 (1Q’23: 25.0%), mainly as a result of changes in the loan mix. The interest yield on the Group’s securities portfolio increased to 7.1% (1Q’23: 5.6%), in connection with growing rouble interest rates.

In 1Q’24, interest expense grew by 216% year-on-year to RUB 38.3 bn (1Q’23: RUB 12.1 bn) due to expansion of the customer base and an increase in market interest rates. The Group’s cost of borrowing increased from 3.8% in 1Q’23 to 8.2% in 1Q’24, which reflects higher interest rates.

In 1Q’24, net interest income grew by 56% year-on-year to RUB 73.2 bn (1Q’23: RUB 46.9 bn).

Fee and commission income increased by 28% to RUB 34.2 bn (1Q’23: RUB 26.7 bn) due to growth in the customer base and expansion of the product range. Net fee and commission income grew by 12% to RUB 18.3 bn (1Q’23: RUB 16.4 bn).

The cost of risk increased to 7.6% in 1Q’24, compared with 7.0% in 1Q’23. The risk-adjusted net interest margin grew to 10.3% (1Q’23: 10.0%).

The share of non-credit business lines declined to 48% of the Group’s revenue (1Q’23: 51%) because of a significant increase in the loan portfolio.

At the end of 1Q’24, the Group had:

• over 34.8 mn current account customers with a total balance of RUB 1,514 bn across all accounts and deposits;
• over 1.2 mn SME customers, with a total account balance of RUB 254 bn;
• 3.9 mn Tinkoff Investments customers with a total asset volume of RUB 1.1 trillion in brokerage accounts.

In 1Q’24, the Group’s total operating expenses increased by 36% from a year earlier to RUB 55 bn (1Q’23: RUB 40.5 bn), driven by the expansion of our customer base and our investments in IT platforms and talent.

The Group’s net profit increased 37% to RUB 22.3 bn (1Q’23: RUB 16.2 bn). ROE was 31.7% (1Q’23: 30.5%).

In 1Q’24, the Group’s balance sheet remained stable. Total assets grew by 46% year-on-year to RUB 2,438 bn (31 Mar ’23: RUB 1,676 bn).

The Group’s net loan book increased by 60% year-on-year to RUB 1,088 bn (31 Mar ’23: RUB 682 bn). The gross loan book grew by 54% to RUB 1,251 bn (31 Mar ’23: RUB 813 bn).

The Group’s NPL ratio fell to 9.2%, indicating an improvement compared with both the previous year (31 Mar ’23: 11.4%) and the preceding quarter (31 Dec ’23: 9.5%). Credit loss allowance coverage was at 1.4x non-performing loans.

The Group’s customer accounts increased by 46% to RUB 1,860 bn as of 31 Mar ’24 (31 Mar ’23: RUB 1,275 bn).

Total equity increased by 27% to RUB 279 bn (31 Mar ’23: RUB 219 bn) on the back of net profit capitalisation.

ADDITIONAL SHARE ISSUE FOR THE INTEGRATION OF ROSBANK PJSC INTO THE GROUP

As part of the deal to integrate Rosbank PJSC into TCS Holding IPJSC, we plan to issue an additional 130 million shares at a price of RUB 3,423.62 per share. The issue will include a reserve of approximately 60 million shares to enable existing shareholders to exercise their pre-emptive rights. Any unused additional shares will be cancelled. Once the procedure for the placement of additional shares is approved, shareholders with pre-emptive rights will receive the corresponding notifications.

The Board of Directors of TCS Holding suggests that, based on market benchmarks, a book value of equity multiplier in the range of 0.9 -1.1 can be used for the fair valuation of Rosbank PJSC. The final valuation will be determined by the Board of Directors based on the results of an independent appraisal and will depend on the results of the due diligence review conducted with the involvement of external consultants.

The expected timeframe for the finalisation of the additional issue and the conclusion of the transaction is the end of the third quarter of 2024.

We plan to regularly present the market with the results of each integration stage until our updated development strategy is released, the presentation of which is scheduled for the end of this year or the beginning of next year. The strategy will include a new dividend policy.

SHARE BUYBACK

In accordance with a Board of Directors resolution, the Group bought back 12 million of its own shares (6% of the Group’s capital) between the beginning of the current year and the end of April, for a total of RUB 35 billion. The shares were repurchased from the market for use in the Group’s long-term management incentive programmes and for other corporate purposes.

GUIDANCE FOR 2024

Considering the strong start to the year and solid economic backdrop, the Group announces the following guidance for 2024:

• active customer base: more than 20% growth year-on-year;
• net interest income: more than 40% growth year-on-year;
• share of non-credit revenue: approximately 50%;
• cost of risk: under 7%;
• cost-to-income ratio: a decrease year-on-year;
• net income: more than 30% growth year-on-year.

KEY EVENTS DURING THE REPORTING PERIOD

Innovative Products and Services

• Tinkoff Investments launched a digital portfolio manager for investors with any level of capital that assembles an investment portfolio based on specified parameters and automatically follows the customer’s chosen strategy. The intelligent system matches the financial capabilities and goals of the investor with analyst forecasts, offering a balanced portfolio.
• Tinkoff launched online market mortgages for new buildings with ‘algorithmic’ insurance, which decreases monthly as the outstanding debt is paid down.
• Tinkoff Investments launched an investment platform called T-Venture for companies making a pre-IPO placement.
• Tinkoff launched Tinkoff Leasing, a car leasing business with one-day document processing.
• Tinkoff started selling gold bars online, with a minimum purchase of 10 grams, with delivery available for all customers.
• The number of partners in the Tinkoff Benefit service — a B2B platform with precise targeting and ready-made marketing solutions for business growth — exceeded 400 companies.
• In the first quarter of 2024, the Tinkoff app added a functionality enabling users to order groceries via X5’s grocery delivery services. Fast delivery (within 30 minutes) from VkusVill grocery stores for Tinkoff customers was also added.
• The turnover of Tinkoff City, an in-app purchasing service for daily shopping with cash back, and the Tinkoff Travel online travel agency grew by 80% year-on-year in the first quarter, reaching RUB 40 bn. More than 2 million users made purchases through these services.

Information Security

• Tinkoff implemented a machine learning-based model that rejects credit applications submitted under the influence of malicious actors.
• Tinkoff launched special mobile teams of Tinkoff Protection employees to dissuade victims of fraud from transferring money to the perpetrators.
• Tinkoff and Positive Technologies launched joint cybersecurity educational programmes at Central University. The first course will train SOC (security operations centre) specialists responsible for security monitoring and incident response.

Attracting and Retaining IT Talent

• In the first quarter of 2024, Tinkoff announced the creation of an IT hub in St Petersburg. The new Tinkoff IT hub is designed for 2,500 employees and will be developed based on the ‘city within a city’ concept, which was already used to create the Tinkoff headquarters on Gruzinsky Val in Moscow.
• In January, Tinkoff launched its third annual scholarship programme for students, under which 200 winning students will receive financial support of RUB 25,000 per month during the next academic year.
• Tinkoff, together with Central University and the Higher School of Economics, held a nationwide school Olympiad in industrial programming, PROD, based on real IT sector tasks.
• Central University, the Graduate School of Management of St Petersburg State University, and Tinkoff held the DEADLINE case championship for school students across Russia.

Social Initiatives

• Tinkoff’s BNPL brand, Dolyami, launched the first DNPL (donate now pay later) service in Russia, enabling donations to charitable organisations to be made in parts. The donor initially contributes 25% of the donation amount, and the remaining 75% is paid over 6 weeks. Meanwhile, charitable organisations receive all the funds immediately, which they can use for urgent needs.
• The Tinkoff Insurance service launched a roadside assistance project in Yekaterinburg. Mobile teams with qualified mechanics began patrolling the city streets in yellow cars and providing free assistance to car owners dealing with problems on the road.
• Tinkoff announced the holding of the nationwide grant competition ‘Pass the Ball’, which for the third consecutive year is enabling proactive individuals and communities across Russia to implement projects in sports, arts, and culture in their neighbourhoods, districts, and villages.

The Group’s financial statements will be available on its website https://tinkoff-group.ru/ и https://tinkoff-group.com/financials/quarterly-earnings/

For enquiries:

ir@tinkoff-group.com

Important Legal Information

NOT FOR PUBLICATION, DISTRIBUTION, OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR TO ANY PERSON IN ANY OF THESE COUNTRIES OR IN ANY OTHER COUNTRY WHERE SUCH ACTION WOULD VIOLATE THE LAWS OF THE COUNTRY IN QUESTION.

The information and statements contained or referred to in this announcement do not constitute or form part of, and should not be construed as, any public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. The distribution of this document in certain jurisdictions may be restricted by law. Recipients are required by the Group to inform themselves about and to observe any such restrictions. No liability to any person is accepted in relation to the distribution or possession of this document in any jurisdiction.

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.

About TCS Group

TCS Group is an innovative provider of digital financial and lifestyle services. Branchless since its inception in 2006, TCS developed a full range of in-house proprietary technology solutions and services, including digital banking, brokerage, acquiring and other merchant solutions, insurance, SME banking and much more.