TCS Group Holding PLC Announces New Dividend Policy effective 1 April 2019

TCS Group Holding PLC Announces New Dividend Policy effective 1 April 2019

Limassol, Cyprus - 28 December 2018. TCS Group Holding PLC (TCS LI) (the "Group"), Russia's leading provider of online retail financial and lifestyle services via its Tinkoff.ru financial supermarket, announces today that the Board of Directors has adopted a new dividend policy effective 1 April 2019.

The decision to adopt a new dividend policy was taken after due consideration by the Group's Board of Directors of a number of factors, including weighing the Group's need to continue to maintain healthy buffers above the required capital ratios and thresholds, alongside the Group's ambitions to support projected above-market loan portfolio growth in the near and medium term and the Group's commitment to enhance total shareholder returns, in an ever-tightening regulatory climate and potentially significant risk weighting changes in Russia from 1 April 2019.

Oliver Hughes, CEO of Tinkoff Bank, commented: "We have always said that if we need more capital to capture strong loan growth momentum while retaining portfolio quality, then we would be prepared to reduce dividends. That time has now come. We believe this is the right move for long-term sustainable shareholder returns, as we balance dividend payments in the short-term with new growth opportunities to increase future returns. The move by the regulator was not unexpected - their preferred choice of instrument is RWA and they have not hesitated to use it of late. Time will tell whether this will have the desired effect, but we welcome this change because we believe that it protects the market from irrational competition and protects the consumer (who is also our customer).

Our loan growth is driven primarily by the growth of our customer base as we continue to diversify our lending product range. We expect another strong year in 2019 as we continue to execute on our 3-year plan realizing an annual net income growth potential of 20-40%, as previously communicated."

The full text of the new dividend policy, as well as the current dividend policy, can be found on the Group's website at https://www.tinkoff.ru/eng/ir/corporate-governance/.

About the Group

TCS Group Holding PLC is an innovative provider of online retail financial services. It includes Tinkoff Bank, mobile virtual operator network Tinkoff Mobile, Tinkoff Insurance, and Tinkoff Software DC, a network of development hubs in major Russian cities. The Group also has Tinkoff.ru, an evolving ecosystem that offers financial and lifestyle services.

The Group was founded in 2006 by Russian entrepreneur Oleg Tinkov and has been listed on the London Stock Exchange since October 2013.

The Group's key business is Tinkoff Bank, the country's first and only direct bank and the core of the Tinkoff.ru ecosystem.

Tinkoff Bank is the second largest player in the Russian credit card market, with a share of 11.4%. The 9M 2018 IFRS net income of TCS Group Holding PLC amounted to RUB 19 bn (a record high 9M net income in the Group's history), ROE grew to 72.9%.

With no branches, the Group serves all its customers remotely via online channels and a cloud-based call centre staffed by over 10,000 employees, which makes it one of the largest in Europe. To ensure smooth delivery of the Group's products, the Group has a nationwide network of over 2,500 representatives.

In 2018 Global Finance named Tinkoff Bank the world's Best Consumer Digital Bank, in 2018, 2016 and 2015, the Best Consumer Digital Bank in Russia, and in 2017 and 2013 The Banker recognised it as the Bank of the Year in Russia. The bank's mobile app has been consistently praised by local and global independent experts as the best of its kind (in 2013, 2014, 2015, 2016 by Deloitte and in 2018 by Global Finance).

Forward-looking statements

Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of the Group and Tinkoff Bank. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might", the negative of such terms or other similar expressions. The Group and Tinkoff Bank wish to caution you that these statements are only predictions and that actual events or results may differ materially. The Group and Tinkoff Bank do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Group and Tinkoff Bank, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Group operates in, as well as many other risks specifically related to the Group, Tinkoff Bank and their respective operations.