Alexander Marrow
MOSCOW (Reuters) – TCS Group Holding’s first-half net profit falls to a five-year low, hit by higher funding costs and conservative provisions for Russian shareholders online bank Tinkoff said Wednesday.
The group did not provide precise figures for many of the indicators. In early March, days after Moscow sent troops into Ukraine, Russian banks told Russian banks that they should not publish certain financial statements to limit risks to credit institutions linked to the imposition of Western sanctions.
“In the first half, net profit fell sharply year-on-year, implying a single-digit return on equity,” TCS said in a filing.
Return on equity for the same period last year was 44.7%.
GMT 1523 TCS’ Moscow-listed depositary receipts fell 5%. Trading in its London-listed GDRs was suspended in early March.
TCS says Tinkoff’s customer count rose to 300,000, up from a year ago Nearly 8 million, which it said supported double-digit growth in quarterly revenue.
The bank stated that interest income increased by 31% year-on-year to 52.2 billion rubles ($872.90 million), but its net interest margin fell by a single-digit percentage.
The increase in TCS risk costs is similar to the increase at the start of the COVID- 19 pandemic 2020, it added.
Shortly before the conflict in Ukraine, Tinkov was preparing to expand in Southeast Asia and had spoken with a payments solutions provider in the Philippines and with regulators in other countries.
However, the past six months have been tumultuous for many Russian businesses. TCS is mum on its Asia plans.
TCS said it has substantial liquidity buffers and adequate capital buffers, which will help it “further adapt to 2022 changing circumstances”.
The lender is not directly sanctioned, but Tinkoff has pointed to problems in conducting SWIFT transactions since major Russian banks were cut off from the messaging system that supports global financial transactions.
The group circled its Russian operations in April, transferring shareholder power over Tinkoff Bank to its Russian management team.
A few weeks later, TCS founder Oleg Tinkov sold his 19% is held by a company controlled by Russian billionaire Vladimir Potanin.
($1 = 59.8000 rubles)
