MOSCOW: Russian consumer lender TCS Group (TCSq.L) reported a 75-percent increase in net profit in the third quarter year-on-year on Monday, saying its performance had allowed it to approve extra dividends. TCS Group’s performance stood out from Russia’s wider banking sector which has been shaken by the bailouts of two major lenders in the space of a month.
The group said net profit increased to 5.0 billion roubles 63.72 million pounds) in the third quarter, in line with a forecast of analysts polled by Reuters. It said its main business, Tinkoff Bank, was the second-largest credit card player in Russia as of Oct. 1, with a market share of 11.6 percent.
Tinkoff CEO Oliver Hughes told a conference call that profit growth had been driven by an expanding loan portfolio and the development of businesses outside the core banking field.
The group said its board had approved a third interim gross dividend for 2017 of $0.22 (0.1661 pounds) per share or global depositary receipt. That takes the overall amount of dividend payment to $40.2 million.
“In addition to this, and due to the stronger than expected bottom-line result, the Board of Directors approved a special interim dividend of $0.18 per share/GDR (with each GDR representing one share), with a total dividend payment of around $32.9 million,” TCS said in its earnings report.
The group’s net margin, which is the revenue after interest, taxes and operating expenses, rose 41 percent to 12.2 billion in the July-September period. Return on equity ratio, an indicator of how much profit it made from shareholders’ investment, increased to 53.7 percent from 43.4 percent a year ago.
Hughes said the bank was sticking to its 2017 net profit guidance of 17 billion roubles and aimed to make at least 24 billion roubles in net profit next year. Looking forward into 2018, the lender said it was expecting net loan growth of at least 25 percent, with the cost of risk rising to 7-8 percent from the current 6 percent.
“The cost of risks will increase slightly as we have attracted many clients this year,” Hughes said, adding that he was surprised by the low cost of risk level in 2017. In the first nine months of this year, net loans and advances to customers rose 30 percent to 134.1 billion, TCS said.
