Russia's TCS says first-quarter net profit fell, without giving figures

The logo of Tinkoff Bank is seen at the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 2, 2021. REUTERS/Evgenia Novozhenina

May 18 (Reuters) - TCS Group Holding (TCSq.L), which runs online bank Tinkoff, Russia's second-largest credit card issuer, said on Wednesday its net profit had fallen year-on-year and quarter-on-quarter, but declined to disclose figures.

The lender, which has not been hit directly by Western sanctions, has nevertheless endured a turbulent few weeks since Russia sent tens of thousands of troops into Ukraine on Feb. 24.

TCS founder Oleg Tinkov in April sold his 35% stake to a firm controlled by Russian billionaire Vladimir Potanin, soon after criticising Moscow's actions in Ukraine. read more

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Russian authorities have allowed banks to limit the information they disclose, and TCS opted not to publish detailed results as it would usually do under International Financial Reporting Standards (IFRS).

TCS said Tinkoff's customer numbers rose to 22.7 million, nearly 8 million more than a year ago, and said group gross revenue "grew materially year-on-year and also increased quarter-on-quarter", while the net interest margin also rose.

"The group has a significant rouble and FX liquidity cushion and ample capital buffers, which will enable it to adapt further to the changing environment in 2022," TCS said.

Net profit, which remained positive, fell due primarily to an increase in funding costs and other factors, TCS said.

TCS, which ring-fenced its Russian business in April, said regular quarterly dividends would remain suspended through December 2022.


Days after Tinkov's first outburst in opposition to events in Ukraine, Tinkoff said it had outgrown the original meaning of its brand based on its founder's name and that recent developments had made a long-planned decision to rebrand even more pressing.

Tinkov has cast his stake sale as a forced measure, telling the New York Times in May that he could not negotiate and had to simply take what he was offered in a deal that saw Potanin benefit, snapping up his second banking asset after buying Rosbank from Societe Generale (SOGN.PA) when the French lender exited the Russian market.

In a subsequent interview this month with Russian blogger Yuri Dud, Tinkov said he and Potanin had discussed terms via Zoom and that he had ultimately sold his stake, which he had estimated at more than $2 billion in early March, for "kopecks".

But a source close to the company contested this, saying Tinkov had decided between five or six buyers, and turned down a different option which would have seen the management team buy out his share.

The company also took issue with Tinkov's claim in the Dud interview that the bank's management team had called him to say they had received a call from Russia's presidential administration threatening to nationalise the bank.

A Tinkoff representative said: "This did not happen, this is a fabrication. These facts do not correspond to reality."

Tinkov, 54, stepped down as chairman of Tinkoff Bank in 2020. TCS said in March that Tinkov did not occupy any decision-making position and sanctions against him would not affect the company.

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Reporting by Reuters; Editing by Alexander Smith and Leslie Adler

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