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TCS Bank net income falls

By BFN News | 01:09 PM | Thursday 14 August, 2014

Net income at Tinkoff Credit Systems Bank, Russia's leading provider of online retail financial services, fell by 1% to RUB2.5bn in the according to unaudited RAS financial highlights for the first seven months of the year. Higher growth in revenue and net interest income was partially offset by increased loan provisioning (partly due to new regulatory requirements and partly due to increasing risk). TCS Group - which includes TCS Bank - says 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 and therefore RAS figures should not be used as the basis for conclusions on forthcoming IFRS results. The gross loan portfolio amounted to RUB 91.2 bln representing an increase of 26% y-o-y and of 12% year-to-date. The net loan portfolio amounted to RUB70.7bn and increased by 12% y-o-y and by 0.1% year-to-date. The short-term slowdown in the growth of the gross loan portfolio in January-July 2014 was partly due to a much stricter underwriting policy. The net loan portfolio constitutes 71% of total assets (68% at 1 August 2013 and 67% at year-end 2013). Retail customer accounts increased by 33% y-o-y and by 1% year-to-date to RUB42.1bn. TCS Bank is currently keeping its retail deposit portfolio flat by maintaining relatively low deposit rates and not soliciting new customer deposits through advertising. The reason for this policy is that TCS Bank is over-liquid: The CBR N2 ratio stands at 86.0% (minimum: 15%), and the CBR N3 ratio is 69.1% (minimum: 50%). Retail customer accounts constitute 52% of total liabilities (38% at 1 August 2013 and 44% at year-end 2013). Total assets increased by 8% y-o-y to RUB100bn. Most of this increase was due to the growth of the loan portfolio. Story provided by

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