TCS Group Holding PLC releases highlights for 3Q22 and 9M22 performance

LIMASSOL, CYPRUS 23 November 2022. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

TCS Group Holding PLC releases highlights for 3Q22 and 9M22 performance

LIMASSOL, CYPRUS 23 November 2022. TCS Group Holding PLC (LI: TCS, MOEX: TCSG) (Tinkoff, We, the "Group", the Company), a leading provider of online financial and lifestyle services via its Tinkoff ecosystem, today announces key performance metrics and trading update for the three months and nine months ended 30 September 2022.

The Tinkoff team continues to work hard keeping our customers' needs in our primary focus, while actively adapting our existing products to changing market conditions and evolving consumer behaviour. The Groups diversified and flexible business model has proven through the years to be highly adaptable to new challenges and opportunities. We continue to actively monitor external environment and customer level data while making our day-to-day decisions, and remain confident in our ability to successfully navigate changing environment.

The number of Tinkoff customers continues to grow organically and exceeded 26 million in 3Q22. Despite sector wide earnings headwinds, Tinkoff has been able to deliver a positive financial result both in 3Q and 9M 2022. The Group continues to maintain a significant liquidity cushion and ample capital buffers, which will enable it to further adapt to the changing environment and capture growth opportunities as they arise.

KEY PERFORMANCE METRICS

FINANCIAL AND OPERATING REVIEW

*Net portfolio

Our total customer base continued to grow steadily and reached 26.3 mn in 3Q22. Once again it underscores the attractiveness of our daily banking and lifestyle ecosystem and lays the foundation for further cross-sell of our expanding products (including credit ones) in line with our customer acquisition strategy.

In 3Q22, the Groups total revenue grew materially showing strong double-digit percentage growth year-on-year, supported by continuous customer base expansion.

Interest income increased by 19% year-on-year to RUB 50.9 bn in 3Q22 (3Q21: RUB 42.9 bn), driven by the higher base of our loan portfolio helped by 2021 expansion, increase of the customer base and expansion of the credit product range.

Gross loan interest yield decreased slightly year-on-year following trend of the previous years. The interest yield on the Groups securities portfolio slightly increased due to higher rates in bond and money markets.

In 3Q22, interest expense rose by 82% year-on-year to RUB 13.2 bn (3Q21: RUB 7.3 bn), driven by a marked increase in our cost of borrowing, owing to the monetary policy environment, as well as an expanded base of the customer funds.

In 3Q22, net interest margin experienced a low single-digit decline in percentage points terms year-on-year, primarily driven by higher funding costs and more liquid composition of the balance sheet.

Fee and commission income increased by 24%% year-on-year in 3Q22 to RUB 27.8bn (3Q21: RUB 22.4bn), supported mainly by the continued growth of our retail and SME banking businesses. At the same time, fee and commission expense declined by 12% year-on-year in 3Q22 to RUB 9.1 bn (3Q21: RUB 10.3 bn) due to lower payment systems costs.

Cost of risk increased materially year-on-year in 9M22 owing to conservative macro-related provisioning and was close to our long-term average level of around 10%.

In 3Q22, our total operating expenses increased 32% y-o-y to RUB 34.1 bn (3Q21: RUB 25.8 bn) driven by our continued investment into our IT talent and capability to support our growing product range and customer base. Our customer acquisition expenses were broadly stable despite growing customer base as we significantly rationalised our marketing and advertising spend.

Our non-credit business lines continue to deliver an increasing share of our revenue and bottom line thanks to growth of the customer base, our widened range of product offerings and continued monetisation efforts.

The Group remained profitable in 9M22 with net profit of RUB 10.1 bn (9M21: RUB 46.8 bn). In 3Q22 our net profit was RUB 5.9 bn (3Q21: RUB 16.5 bn), decreasing 64% year-on-year, primarily impacted by growth in funding costs and conservative provisioning.

In 3Q22, the Group maintained a healthy balance sheet with stable total assets compared to the end of 2021.

In 3Q22, the net loan book decreased by 4% YTD to RUB 584 bn (31 Dec21: RUB 606 bn). The Groups customer accounts increased by 2% YTD to RUB 961 bn (31 Dec21: RUB 946 bn).

The Groups capital position remained strong, with Basel III CET1 ratio being stable year-on-year. In 3Q22, all statutory capital requirements were met with healthy buffers.

The Group aims to continue to honor its obligations to bondholders subject to regulatory constraints.

3Q2022 REPORTING PERIOD OPERATING HIGHLIGHTS

• The Group had over 21.9 mn total Tinkoff Black customers as of 1 October 2022.

• In July, Tinkoff launched universal Tinkoff ID. The service provides quick and secure authentication and unified access to any service on the Russian Internet. Tinkoff ID enables users to securely, quickly, and seamlessly log in to various services across the Russian Internet, without entering a login or password.

• In July, Tinkoff Capital launched a closed-end fund for investing in residential real estate at the stage of commencement of construction, with the aim of selling the properties on once they become operational.

• In August, Tinkoff launched Tinkoff Neuro Shield, a security platform for Tinkoff Bank and Tinkoff Mobile customers, providing the highest possible protection on the market against fraud and spam. This is the first time in Russia that security tools from a bank (banking algorithms for protection against social engineering) and a telecoms operator have been integrated into a single platform.

• In September, Tinkoff began offering deposits denominated in Chinese yuan.

For enquiries:

Tinkoff PR Department

pr@tinkoff.ru

Tinkoff IR Department

ir@tinkoff.ru

About TCS Group

TCS Group is an innovative provider of digital financial and lifestyle services. Branchless since its inception in 2006, TCS developed a full range of in-house proprietary technology solutions and services, including digital banking, brokerage, acquiring and other merchant solutions, insurance, SME banking and much more.

UK MAR

This announcement is released by TCS Group Holding plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal Act) 2018 ("UK MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of UK MAR.

Forward-looking statements

Some of the information in this announcement may contain projections or other forwardlooking 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.