* Higher loan loss provisions hit credit card group
* TCS to review full-year profit guidance
* Shares down 6.2 percent in London
MOSCOW, June 9 Russian consumer credit company
TCS said first-quarter net profit fell 64 percent,
year-on-year, driven by higher loan-loss provisions as the
Russian economy slows.
TCS, owner of Tinkoff Credit Systems, which went public in
London in October, said first-quarter net profit fell to 362.3
million roubles ($10.54 million) from 1 billion roubles a year
earlier, missing analysts' forecasts.
The company's shares fell 6.2 percent in early London
TCS said on Monday its cost of risk - the reserves it would
have to set aside this year to cover lending risks - rose to
20.5 percent from 16.2 percent a year ago.
Its return on equity - a measure of profitability - fell to
7.0 percent in the first quarter from 41.2 percent for the whole
of last year.
TCS said in a statement that its full-year profit guidance
of over 7 billion roubles was now under review.
The company, majority owned by Russian entrepreneur Oleg
Tinkov, has challenged state-controlled banks and grabbed market
share in the high-margin business of consumer credit. It focuses
on Russia's regions, where it delivers credit cards by courier.
A Reuters survey of seven analysts had forecast that net
profit at TCS would be 969.7 million roubles in the first
quarter, 6 percent down on the year-earlier figure.
The Russian central bank last year toughened regulation of
consumer credit companies, forcing them to raise their
provisions against bad loans to prevent them from destabilising
the wider financial system.
A slowdown in the Russian economy, which is forecast to
achieve growth of just 0.5 percent this year amid instability
caused by the Ukraine crisis, has also increased the share of
non-performing loans at major banks including Sberbank
TCS said its share of non-performing loans rose to 8.9
percent in the first quarter from 7 percent for the whole of
($1 = 34.3875 Russian Roubles)
(Reporting by Alexander Winning, editing by Mark Trevelyan)