At the end of 4Q'20, the Group had: ? over 7.5 mn total current account customers with a total balance of RUB 323.1 bn across all accounts ? over 385k total SME customers, with a total current account balance of RUB 89.1 bn ? over 1.25 mn total Tinkoff Investments customers
In 4Q'20, operating expenses increased 65.9% year-on-year to RUB 19.4 bn (4Q'19: RUB 11.7 bn) driven by resumed growth of our loan portfolio, and investments into our fast growing new business lines.
The Group reported robust quarterly net profit of RUB 12.3 bn in 4Q'20 (4Q'19: RUB 11.0 bn), supported by continued customer acquisition and monetisation. As a result, ROE for 4Q'20 stood at 40.5% (4Q'19: 49.0%).
In 4Q'20, the Group continued to maintain a healthy balance sheet, with total assets growing by 48.1% since the end of 2019 to RUB 859.3 bn (31 Dec'19: RUB 580.0 bn).
The Group's gross loan book grew by 16.0% since the end of 2019 to RUB 445.5 bn (31 Dec'19: RUB 383.9 bn), while the net loan book increased by 14.4% to RUB 376.5 bn (31 Dec'19: RUB 329.2 bn).
The Group's NPL ratio rose to 10.4% (31 Dec'19: 9.1%), while our credit loss allowance coverage stood at 1.5x non-performing loans.
The Group's customer accounts increased by 52.3% since the end of 2019 to RUB 626.8 bn (31 Dec'19: RUB 411.6 bn).
Tinkoff's total equity over 2020 rose by 32.2% to RUB 127.0 bn at the end of FY'20 (31 Dec'19: RUB 96.1 bn) even after the payment in 2020 of four interim dividends (total of USD0.80/GDR), on the back of solid net profit. As of 1 January 2021 the Group's statutory N1.0 ratio amounted to 13.1%, its N1.2 ratio stood at 12.4%, and the N1.1 ratio stood at 10.2%.
2021 Interim Dividend Announcement
In line with the Group's dividend policy, the Group's Board of Directors has approved a first 2021 interim gross cash dividend of USD 0.24 per share/per GDR (with each GDR representing one Ordinary share) with a total amount allocated for dividend payment in relation to 4Q of around USD 48 mn. Subject to London Stock Exchange regulations, indicatively the dividend will be payable on 29 March 2021 to those shareholders on the register as at the record date of 26 March 2021. The ex-dividend date will be 25 March 2021. According to the terms of the GDR deposit agreement, holders of the Group's GDRs should receive their dividends approximately 5 business days after the payment date.
GUIDANCE FOR 2021
With the gradual recovery in economic activity on top of strong performance in 2020, the Group is pleased to announce the following performance guidance for 2021: ? We expect our net loan portfolio growth to be more than 30% ? We expect cost of risk to be 7-8% ? We expect cost of borrowing to be in the 3-4% range ? We expect the share of non-credit revenues to be more than 40% of total revenues ? We expect net profit to be at least RUB 55 bn
The Group also plans to temporarily suspend dividends for the remainder of 2021 as it further assesses both organic and inorganic growth opportunities. It is management's belief that allocating capital to additional growth now is the best way of guaranteeing a sustainable and profitable business into the future. Growth opportunities will be discussed in more detail at the Strategy Day to be held on April 7 2021.
Some of the accumulated capital might also be used to buy back up to 1 mn GDRs to fund commitments to MLTIP, as previously communicated to the market.
4Q'2020 AND POST-REPORTING PERIOD OPERATING HIGHLIGHTS
Customer base and engagement growth has led to increased market share ? The Group had over 7.5 mn total Tinkoff Black customers as of 1 January 2021. ? As of 1 January 2021, the Tinkoff app had over 30.05 mn installs, and Group MAU stood at 9.3 mn, Group DAU stood at
3.2 mn. ? Tinkoff Bank's credit card market share increased to 14.0% as of 1 January 2021, further solidifying its position
as Russia's second largest credit card issuer. ? Tinkoff moved up 44 positions to 91st place in the ranking of the top banks in the world by debit card turnover
thanks to the growth in Tinkoff Black, according to the Nilson Report.
Superior and innovative product offering combined with targeted marketing activities secure Tinkoff's place as a leading fintech brand ? In December Tinkoff Mobile launched a new 2.0 version of its voice assistant Oleg, which enables customers to
create their own mobile concierge with custom features. ? Tinkoff launched Tinkoff Call Defender, a platform designed to prevent fraud and social engineering in the telecom
sector developed as part of the comprehensive Tinkoff Security system to protect the ecosystem customers. It was
developed in partnership with major Russian mobile operators, including Megafon, MTS, Tele2 and Tinkoff Mobile. ? Tinkoff launched a free service called "Who is Calling?", which identifies incoming caller IDs and helps to protect
against scammers and spam calls. ? Tinkoff adopted a cutting-edge approach to credit-scoring based on securely-merged data on oneFactor platform. It
includes AI-powered predictive analytics tools, based on combined data from multiple sources, including telecom
operators, Russia's largest credit bureau and Tinkoff itself. ? In January, Tinkoff Insurance became a partner of Sber's insurance marketplace. Now customers on the Sber
marketplace can purchase both voluntary KASKO and mandatory OSAGO car insurance policies. ? In January Tinkoff integrated its Oleg voice assistant into its own phone call center, aiding customer service
representatives in dealing with customer queries. ? In February Tinkoff launched Tinkoff Checkout, an online and offline payment service for legal entities which
operates as a one-stop shop, enabling companies to take care of all of their online and offline financial needs in
one place. ? In February Tinkoff Business launched "Business Saving Box" - a service that allows our SME customers to
automatically save and allocate their income for various purposes such as taxes, rent, salaries, etc.
Commitment to further improving our Investor Relations (IR) disclosure and ESG practices ? Tinkoff's senior management team will hold a virtual Strategy Day for analysts and investors on 7 April 2021 to
present its growth opportunities and medium term targets. ? Tinkoff is progressing its latest Sustainability report which it expects to publish by June 2021. ? In January all outstanding 69,914,043 Class B shares in the Group, held by trusts connected with Oleg Tinkov, were
converted to and reclassified as Ordinary shares (after 10,100,181 Class B Shares were converted to GDRs in
December 2020). Following this latest conversion and reclassification, Oleg Tinkov's voting rights in the Group
decreased to around 35% from 84% aligning all shareholders' interests ever more closely. ? In February 2021 Tinkoff's GDRs were added to the MSCI Russia Standard Index with a pro-forma weight of 4.69%. ? In February 2021 the Group announced the launch of an updated version of its management long-term incentive program
(MLTIP) and its Key-Employee Retention Programme (KERP). The updated equity-based MLTIP includes awards currently
totalling 5.35 mn GDRs and vests over 5 years starting from August 2021, while the cash-based equity-linked KERP
initially covers around 300 beneficiaries. ? Tinkoff is now presenting two new customer metrics: "Total customers", which represent customers that have utilised
a Tinkoff product and have not closed it. "Active customers", which represent customers that have generated revenue
for Tinkoff over the previous month. ? Tinkoff has revamped its segmental financial reporting to provide further insight into its growth and profit
drivers. Tinkoff now presents its P&L across 7 different segments: Consumer Finance, Retail Debit Cards (Tinkoff
Black), SME Services (Tinkoff Business), InvestTech (Tinkoff Investments), Acquiring and Payments, InsurTech and
The market and industry associations recognised Tinkoff's strong performance ? Tinkoff was ranked among the top 100 Emerging Market Technology Companies and become one of six Russian companies
on the list compiled by Boston Consulting Group (BCG). Companies from 14 countries were included in the list and
judged by six criteria to verify their promising business models, proven market traction and market-leading
position. ? Tinkoff was named the world's Best Consumer Digital Bank at Digital Bank Awards 2020 organised by Global Finance
magazine. It was also named the Best Consumer Digital Bank in CEE and won top recognition in the Best Mobile
Banking App and the Best Web Site Design subcategories. ? Tinkoff was named among world's top 3 neo-banks according to WhiteSight Moscow and was the only profitable bank on
the list. The ranking takes into account such metrics as capitalisation and market valuation and compares digital
banks across various parameters such as user base, funding, investors and more. ? Tinkoff's super app was named the Best Mobile Banking App at the Core of a Financial Ecosystem and the Best Mobile
Banking for Daily Operations (for the second year in a row) for iOS and Android, according to Markswebb's Mobile
Banking Rank 2020 rankings. ? Tinkoff won first place in the Employee Development and Training nomination for its Tinkoff Life well-being
programme, which successfully helps to retain employees and attract new talents from the IT sphere, at the IT HR
Awards 2020. Tinkoff was also ranked 3rd in Forbes' rating of Best Russian Employers. ? In February Tinkoff strengthened its standing in the Brand Finance Banking 500's ranking in 2021, moving up 28
spots to 298th position. ? In February, Tinkoff was ranked 4th in the Rating of Best Employers in Russia 2020 published by HeadHunter. It was
also ranked 5th in HeadHunter's subrating Most Popular among Jobseekers based on the company's visibility and
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