European Markets

New customers drive record Q3 profit at Russian lender TCS

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MOSCOW, Nov 24 (Reuters) - Russian lender TCS Group Holding (TCSq.L) reported record third-quarter net profit as it attracted new customers and confirmed its full-year profit forecast, but said it would not resume paying dividends in the near term.

Net profit rose 31% year on year to 16.5 billion roubles ($221.8 million) in July-September, while total revenue increased by 48% to 71.7 billion roubles.

The group, which runs Russia's largest online bank, Tinkoff, confirmed its 2021 profit guidance at no less than 60 billion roubles.

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But TCS is not planning to resume paying dividends "in the first quarters" of 2022, as the inclusion of Tinkoff in a list of systemically important lenders adds pressure to the bank's capital adequacy, Tinkoff's Chief Financial Officer Ilya Pisemsky said.

In October, Russia added Tinkoff to the list of systemically important banks thanks to its rapidly growing client base, meaning the lender will face stricter requirements but may count on support if it runs into trouble.

TCS had earlier planned to resume paying dividends in early 2022 after suspending them in March 2021 as it studied opportunities to expand.

Group co-CEO Pavel Feodorov said on Wednesday TCS was not planning to buy major businesses in Russia, such as Citi's operations in Russia, and was focusing more on organic growth.

TCS also lowered its cost of risk projection to below 5% from the 5% area expected previously as its non-performing loan ratio fell to 8.6% at the end of September from 10.3% in late 2020.

Tinkoff had 18.5 million customers at the end of September versus 12.1 million a year earlier, it said.

TCS earnings represent "a good beat, supported by lower provisions, yet very solid business growth dynamics," BCS Global Markets analysts said.

TCS's depositary receipts on the Moscow Exchange outperformed the market after the earnings report, climbing 3.4% on the day compared with a 0.8% increase in the benchmark MOEX index (.IMOEX).

($1 = 74.4006 roubles)

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Writing by Andrey Ostroukh; Additional reporting Polina Devitt; Editing by Louise Heavens and Mark Potter

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