Tinkoff Bank RAS 9M2016 Results

Statement on Tinkoff Bank's RAS Financial Highlights for January-September 2016

Moscow, Russia - 18 October 2016. TCS Group Holding PLC (TCS LI) (the "Group"), including Tinkoff Bank, Russia's leading provider of online retail financial services, today announces Tinkoff Bank's unaudited RAS financial highlights for January-September 2016.

For the first nine months of 2016, net income stood at RUB 6.4bn versus RUB 1.7bn in January-September 2015 which is attributed to the growth of net interest income and better quality of the loan portfolio.

It should be noted that the RAS net income figure is not a reliable indicator of IFRS net income for the same period. There is a very low correlation between financial results under the two reporting standards as a result of significant accounting differences. Therefore, RAS figures should not be used as the basis for conclusions on forthcoming IFRS results. 

The gross loan portfolio amounted to RUB 115.9bn representing an increase of 16% y-o-y. The net loan portfolio amounted to RUB 94.5bn having increased by 28% y-o-y and constituted 58% of total assets (64% at year-end 2015). 

Retail customer accounts increased by 47% y-o-y to RUB 107.7bn. Tinkoff Bank continued to retain substantial liquidity: the CBR N2 ratio stood at 49.9% (minimum requirement: 15%), and the CBR N3 ratio was 179% (minimum requirement: 50%). Retail customer accounts constituted 78% of total liabilities.

Total assets increased by 40% y-o-y to RUB 162.5bn.

As of 1 October 2016, total capital including retained profits (based on Form 123) amounted to RUB 28.3 bn. The CBR N1 capital adequacy ratio was 11.58%. Both Core Capital Adequacy Ratio (N1.1) and Main Capital Adequacy Ratio (N1.2) were 7.26%.

Note on RAS results

Please note that the figures in this press release are calculated in accordance with Tinkoff Bank's internal methodology which is available at:

http://static.tinkoff.ru/documents/eng/investor-relations/ras-methodology.pdf

RAS results are not a reliable indicator of IFRS results due to significant accounting differences that make a direct read-across from RAS to IFRS results impossible. The main differences between RAS and IFRS are:

• Consolidated results under IFRS include a number of additional items and results of its subsidiaries

• Accrual of expenses under IFRS

• Timing differences in accounting for restructured loans ('instalments') and loans going through courts

• The effect from the revaluation of currency derivative instruments

• The effect of deferred income tax.

About the Group

TCS Group Holding PLC is an innovative provider of online retail financial services operating in Russia through a high-tech branchless platform. The Group has also developed a "smart courier" network covering almost 600 cities and towns in Russia which allows next day delivery to many customers.

Tinkoff Bank's product range includes credit, debit and prepaid cards, deposits, co-branded cards, and agent-based mortgage products. With its special focus on mobile, the bank offers mobile applications both for its customer base (Mobile Bank) and beyond it (Traffic Fines, MoneyTalk, Card 2 Card instant money transfers).

As per its five-year strategy, the Group has the ambition to become a financial marketplace, offering both own brand and partner products.

As at 1 August 2016, the bank was the second largest player in the Russian credit card market, with a market share of 9.6%. The Group's 1H 2016 IFRS net income amounted to RUB 4.4 bn.

In 2015 and 2016, the Global Finance magazine named Tinkoff Bank as the Best Consumer Digital Bank in Russia. In 2016, the bank also won Global Finance's Best Integrated Consumer Bank Site award and was named the Best Digital Bank in the CEE by Euromoney. The bank's mobile application was recognised as the best in Russia by Markswebb Rank & Report for three consecutive years in 2014, 2015 and 2016, and by Deloitte for four consecutive years from 2013 to 2016.