MOSCOW — 20 August 2024.
International public joint stock company TCS Holding (MOEX: TCSG) («TCS», the «Group», the «Holding», the «Company»), a tech leader in lifestyle and financial services, announces its consolidated IFRS results for the three and six months ended 30 June 2024.

• Total revenues increased 72% to RUB 193.4 bn in 2Q’24 (2Q’23: RUB 112.3 bn)
• Net profit was RUB 23.5 bn in 2Q’24 (2Q’23: RUB 20.4 bn)
• Total customers rose 24% to 44.0 mn in 2Q’24 (2Q’23: 35.3 mn)
• ROE reached 32.7% in 2Q’24
• The Group adopted a new dividend policy that calls for up to 30% of net profit to be paid out in dividends

The head of Group, Stanislav Bliznyuk, said:

«In the second quarter of 2024, TCS Holding demonstrated robust growth in key business metrics and continued making strategic investments in future growth areas and technological innovations. The number of customers actively using the Group’s products and services each month continues to grow steadily, surpassing the important milestone of 30 million in the second quarter, while the total number of customers rose to 44 million.

In the second quarter, our net credit portfolio increased by 9% compared with the previous quarter, reaching RUB 1.2 trillion. Customer funds grew by 23% over the same period to RUB 2.3 trillion. This once again demonstrates our excellent reliability in the eyes of our customers and their trust. Our balance remains very liquid and profitable as we invest new customer funds in money market instruments that provide solid returns without diverting capital. This is reflected in our return on equity, which rose to 32.7% in the second quarter. Despite external pressures, such as rising market interest rates and tighter lending regulations from the Bank of Russia, we maintain our guidance for net profit growth of more than 30% for the year.

The Group continues to actively invest in strategic technologies and is already among the top players when it comes to developing and deploying large language models to solve customers’ everyday challenges. The Group’s large language model, T-Lite, outperforms global peers on industry and internal benchmarks. This is an impressive achievement for T-Bank’s Artificial Intelligence Centre and highlights our contribution to the country’s technological leadership».

The Chairman of TCS Holding’s Board of Directors, Alexey Malinovsky, said:

«In August, TCS Holding completed the integration of Rosbank — a strategic project designed to consolidate the Group’s financial market position, including through synergies in terms of product offerings for retail and corporate clients. The deal greatly enhances the Group’s capital position, enabling it to accelerate business growth, increase return on equity, and maximise shareholder value.

Based on the premium between the Group’s announced share price for the additional share issue, RUB 3,423.62, and TCS’s current stock price, Rosbank’s acquisition multiple amounted to 0.8 times its capital. As part of the deal, 69 million new shares were issued, bringing the Group’s total equity capital to over RUB 530 billion. At the same time, the book value of the Group’s equity capital per share increased by more than 30% after the additional share issue. TCS Holding’s shareholder structure is highly diversified, with a significant free float and the share of the largest non-controlling shareholder of 41.4%

The effective use of the capital acquired through this transaction, combined with the ecosystem’s steadily growing base of loyal customers, will enable the Group to successfully execute its growth strategy for the coming years. The Group’s Board of Directors expects management to propose specific steps for the effective integration of Rosbank into TCS Group in the near future».

KEY PERFORMANCE METRICS

Key metrics, mn	2Q’24	2Q’23	1Q’24	Y-o-Y Change, %	Q-o-Q Change, %
Total customers	44.0	35.3	41.9	24%	5%
Active customers	30.4	24.5	29.0	24%	5%
Monthly active users (MAU)	30.3	25.2	29.1	20%	4%
Daily active users (DAU)	14.1	10.7	13.2	32%	7%

OVERVIEW OF FINANCIAL AND OPERATING PERFORMANCE

RUB bn	2Q’24	2Q’23	∆	1Q’24	∆	1H’24	1H’23	∆
Interest income	132.6	67.9	95%	113.5	17%	246.1	128.1	92%
Interest expense	-52.5	-13.1	4.0x	-38.3	37%	-90.8	-25.2	3.6x
Net interest income	77.7	53.5	45%	73.2	6%	150.9	100.4	50%
Net interest income after provisions	54.8	42.4	29%	52.0	5%	106.8	77.1	39%
Fee and commission income	42.2	30.2	39%	34.2	23%	76.4	56.9	34%
Fee and commission expense	-18.1	-13.6	33%	-15.9	14%	-34.0	-23.9	42%
Net fee and commission income	24.0	16.6	45%	18.3	31%	42.4	33.0	28%
Total operating expenses	-59.8	-45.2	32%	-55.0	9%	-114.8	-85.7	34%
Profit before tax	29.6	25.2	18%	28.2	5%	57.9	46.1	26%
Net profit	23.5	20.4	15%	22.3	5%	45.7	36.6	25%

Ratios	2Q’24	2Q’23	∆	1Q’24	∆	1H’24	1H’23	∆
Return on equity	32.7%	35.5%	-2.8 p.p.	31.7%	1 p.p.	32.0%	33.0%	-1 p.p.
Net interest margin	12.5%	13.3%	-0.8 p.p.	13.5%	-1 p.p.	12.9%	12.9%	0.0 p.p.
Cost of risk	7.5%	5.7%	1.8 p.p.	7.6%	-0.1 p.p.	7.5%	6.3%	1.2 p.p.

RUB bn	30 Jun 2024	31 Mar 2024	∆	31 Dec 2023	∆	30 Jun 2023	∆
Total assets	2,884	2,438	18.3%	2,270	27.0%	1,753	64.5%
Net loans and advances to customers	1,190	1,088	9.3%	972	22.4%	784	51.8%
Cash and treasury portfolio	924	673	37.4%	724	27.6%	446	2.1x
Total liabilities	2,588	2,159	19.9%	1,986	30.3%	1,514	71.0%
Customer accounts	2,292	1,860	23.2%	1,713	33.8%	1,313	74.5%
Total equity	296	279	6.1%	284	4.2%	239	23.6%

Ratios	30 Jun 2024	31 Mar 2024	∆	31 Dec 2024	∆	30 Jun 2024	∆
Share of NPLs	9.3%	9.2%	0.1 p.p.	9.5%	-0.2 p.p.	10.3%	-1 p.p.
Tier I capital ratio	14.3%	15.2%	-0.9 p.p.	16.9%	-2.6 p.p.	18.4%	-4.1 p.p.
Total capital ratio	14.3%	15.2%	-0.9 p.p.	16.9%	-2.6 p.p.	18.4%	-4.1 p.p.

The number of active Group customers increased by 5% quarter-on-quarter and by 24% year-on-year, exceeding 30 mn. The total number of T-Bank customers reached 44 mn.

The total customer purchases turnover rose 38% year-on-year and amounted to RUB 2.1 tn in Q2. The GMV of our own transaction and lifestyle services (such as City and Travel) increased by 60% year-on-year and amounted to RUB 50 bn.

In 2Q’24, the Group’s total revenue grew by 72% year-on-year to RUB 193.4 bn (2Q’23: RUB 112.3 bn). Gross interest income increased by 95% year-on-year to RUB 132.6 bn (2Q’23: RUB 67.9 bn) due to the growth of the loan portfolio and expansion of operations in the money market.

Gross yield on the loan portfolio reached 27.9% in 2Q’24 (2Q’23: 25.5%) due to rising market interest rates and changes in the structure of loan products. The interest yield on the Group’s securities portfolio increased to 7.6% (2Q’23: 5.6%) due to the growth of interest rates compared with the same period last year.

In 2Q’24, interest expense grew fourfold year-on-year to RUB 52.5 bn (2Q’23: RUB 13.1 bn). The Group’s cost of borrowing increased from 3.9% in 2Q’23 to 9.7% in 2Q’24, following the year-on-year increase in interest rates.

In 2Q’24, net interest income grew by 45% year-on-year to RUB 77.7 bn (2Q’23: RUB 53.5 bn).

Fee and commission income increased by 39% from a year earlier to RUB 42.2 bn (2Q’23: RUB 30.2 bn). Net fee and commission income grew by 45% to RUB 24.0 bn (2Q’23: RUB 16.6 bn).

The cost of risk increased to 7.5% in 2Q’24, compared with 5.7% in 2Q’23. The risk-adjusted net interest margin declined to 8.8% (2Q’23: 10.5%).

Net operating revenue increased by 41% year-on-year to RUB 114 bn. The share of net revenue from the retail lending segment decreased to 39% (49% in Q2’23), which is further evidence of our diversified business model.

At the end of 2Q’24, the Group had:

¾ more than 23 mn active customers in the debit card and current account segment, with total funds in current accounts and other deposits amounting to RUB 1.9 tn;

¾ over 730,000 active customers in the SME segment with a total balance of funds in their accounts of RUB 278 bn;

¾ 4 mn T-Investments customers with a total asset volume of RUB 1.1 tn in brokerage accounts.

In 2Q’24, the Group’s total operating expenses increased by 32% from a year earlier to RUB 59.8 bn (2Q’23: RUB 45.2 bn), driven by the expansion of the customer base and investments in IT platforms and talent.

The Group’s net profit increased by 15% in 2Q’24 to RUB 23.5 bn (2Q’23: RUB 20.4 bn). ROE reached 32.7%, improving from 31.7% in 1Q’24 (2Q’23: 35.5%).

As of end of 2Q’24, the Group’s balance sheet showed strong growth. Total assets grew by 65% year-on-year to RUB 2,884 bn (30 Jun ’23: RUB 1,753 bn).

The Group’s net loan book increased by 52% year-on-year to RUB 1,190 bn (30 Jun ’23: RUB 784 bn). The gross loan book grew by 49% to RUB 1,368 bn (30 Jun ’23: RUB 920 bn).

The Group’s NPL ratio was 9.3% (30 Jun ’23: 10.3%). Credit loss allowance coverage was at 1.4x non-performing loans.

The Group’s customer funds increased by 75% to RUB 2,292 bn (30 Jun ’23: RUB 1,313 bn).

Total equity increased by 24% to RUB 296 bn (30 Jun ’23: RUB 239 bn) on the back of net profit capitalisation.

DIVIDEND POLICY

The Group has adopted a new dividend policy that provides for the payment of up to 30% of net profit for the year. Considering the conditions outlined in the dividend policy, the Group will aim to declare dividends based on the results of each quarter.

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.