March 12, 2019 / 12:33 PM / 5 months ago

UPDATE 1-Russian lender TCS reports record net profit in 2018

* TCS reports record quarterly and annual profit

* Sees “conservative” loan growth in 2019 of around 40 pct

* Board approves interim dividends

* TCS’s GDRs jump on London Exchange (Adds detail, price reaction, analyst comment)

By Andrey Ostroukh

MOSCOW, March 12 (Reuters) - Russian consumer lender TCS Group reported on Tuesday a record net profit for 2018, and forecast it would rise further this year, albeit amid slower lending growth.

TCS, the parent company of Tinkoff Bank, said its net income jumped 27 percent to 8.1 billion roubles ($123 million) in the fourth quarter, up from 6.4 billion roubles in the same period a year earlier.

Boosted by a 77 percent increase in fee and commission (F&C) income, TCS’s net income leapt 43 percent for the whole of 2018 to 27.1 billion roubles.

“These strong results were driven by both credit and F&C business lines, as we continued to expand our financial and lifestyle ecosystem which now serves well over 8 million customers,” said Tinkoff Bank CEO Oliver Hughes.

In 2019, the group expects its net profit to increase to 35 billion roubles, but its loan portfolio growth is seen slowing to around 40 percent from 53 percent in 2018, TCS said.

VTB Capital analysts said the results were better than the market consensus and reiterated their ‘buy’ rating on the stock. But they injected a note of caution.

“While the results were strong and guidance upbeat, we are sceptical about the quality of growth from here: competition is intensifying and consumer leverage is growing fast, which we expect to lead to deterioration of the risk reward ratio,” they said.

TCS said its board of directors had approved a first interim gross cash dividend for 2019 of $0.32 per share or global depositary receipt (GDR), with each GDR representing one share.

The total dividend payment would amount to $58.4 million, the lender said, adding dividends could be lowered in the future if needed.

The results boosted the lender’s GDR price in London, which increased 8.6 percent on the day to $20.10.

TCS Group’s performance stands out from Russia’s wider banking sector, which has been shaken by the withdrawal of dozens of banking licences.

$1 = 65.7300 roubles Additional reporting by Tatiana Voronova; Editing by Louise Heavens and Mark Potter

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