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    TCS   US87238U2033

TCS GROUP HOLDING PLC

(TCS)
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TCS : Interim Condensed Consolidated IFRS Results for 3Q and 9M 2020

11/12/2020 | 03:19am EDT

TCS Group Holding PLC

International Financial Reporting Standards Consolidated Condensed Interim Financial Information (Unaudited)

30 September 2020

TCS Group Holding PLC

CONTENTS

CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION

Consolidated Condensed Interim Statement of Financial Position..............................................................................

1

Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income.............................

2

Consolidated Condensed Interim Statement of Changes in Equity.............................................................................

3

Consolidated Condensed Interim Statement of Cash Flows.......................................................................................

4

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL INFORMATION

1

Introduction......................................................................................................................................................

5

2

Operating Environment of the Group ...............................................................................................................

7

3

Significant Accounting Policies...........................................................................................................................

9

4

Critical Accounting Estimates and Judgements in Applying Accounting Policies ................................................

11

5

Adoption of New or Revised Standards and Interpretations ..........................................................................

12

6

New Accounting Pronouncements.................................................................................................................

13

7

Cash and Cash Equivalents ..........................................................................................................................

14

8

Loans and Advances to Customers...............................................................................................................

14

9

Investments in Securities...............................................................................................................................

33

10

Repurchase Receivables...............................................................................................................................

34

11

Due to Banks .................................................................................................................................................

35

12

Customer Accounts .......................................................................................................................................

35

13

Share Capital, Share Premium and Treasury Shares....................................................................................

36

14

Net Margin .....................................................................................................................................................

37

15

Fee and Commission Income and Expense ..................................................................................................

38

16

Customer Acquisition Expense......................................................................................................................

39

17

Administrative and Other Operating Expenses..............................................................................................

39

18

Dividends.......................................................................................................................................................

40

19

Segment Analysis ..........................................................................................................................................

41

20

Management of Capital ...................................................................................................................................

48

21

Contingencies and Commitments ....................................................................................................................

49

22

Fair Value of Financial Instruments ..................................................................................................................

53

23

Related Party Transactions..............................................................................................................................

57

24

Events after the End of the Reporting Period....................................................................................................

59

Report on review of Consolidated Condensed Interim Financial Information

To TCS Group Holding PLC

Introduction

We have reviewed the accompanying consolidated condensed interim statement of financial position of TCS Group Holding PLC and its subsidiaries (the 'Group') as at 30 September 2020 and the related consolidated condensed interim statement of profit or loss and other comprehensive income for the three-month and nine-month periods then ended, and consolidated condensed interim statements of changes in equity and cash flows for the nine- month period then ended, and notes, comprising a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and presentation of this consolidated condensed interim financial information in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated condensed interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated condensed interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

PricewaterhouseCoopers Limited

Certified Public Accountants and Registered Auditors

11 November 2020

Nicosia

Cyprus

PricewaterhouseCoopers Ltd, PwC Central, 43 Demostheni Severi Avenue, CY-1080 Nicosia, Cyprus P O Box 21612, CY-1591 Nicosia, Cyprus

T: +357 22 - 555 000, F:+357 - 22 555 001, www.pwc.com.cy

PricewaterhouseCoopers Ltd is a private company registered in Cyprus (Reg. No.143594). Its registered office is at 3 Themistocles Dervis Street, CY-1066, Nicosia. A list of the company's directors, including for individuals the present and former (if any) name and surname and nationality, if not Cypriot and for legal entities the corporate name, is kept by the Secretary of the company at its registered office. PwC refers to the Cyprus member firm, PricewaterhouseCoopers Ltd and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Financial Position

30 September 2020

31 December

In millions of RR

Note

(Unaudited)

2019

ASSETS

Cash and cash equivalents

7

73,481

57,796

Mandatory cash balances with the CBRF

4,793

3,448

Due from other banks

1,882

2,084

Loans and advances to customers

8

346,313

329,175

Financial derivatives

7,343

390

Investments in securities

9

233,091

135,178

Repurchase receivables

10

5,048

-

Guarantee deposits with payment systems

11,488

8,877

Current income tax assets

4,332

815

Deferred income tax assets

959

1,517

Tangible fixed assets and right-of-use assets

10,720

10,560

Intangible assets

6,070

5,435

Other financial assets

16,464

21,673

Other non-financial assets

3,590

2,510

TOTAL ASSETS

725,574

579,458

LIABILITIES

Due to banks

11

14,108

663

Customer accounts

12

513,426

411,614

Debt securities in issue

25,446

26,078

Financial derivatives

153

590

Deferred income tax liabilities

-

142

Subordinated debt

22,367

18,487

Insurance provisions

5,969

6,280

Other financial liabilities

18,236

14,648

Other non-financial liabilities

9,382

4,874

TOTAL LIABILITIES

609,087

483,376

EQUITY

Share capital

13

230

230

Share premium

13

26,998

26,998

Treasury shares

13

(3,238)

(3,164)

Share-based payment reserve

13,23

905

1,039

Retained earnings

90,980

66,880

Revaluation reserve for investments in debt securities

495

3,996

Equity attributable to shareholders of the Company

116,370

95,979

Non-controlling interest

117

103

TOTAL EQUITY

116,487

96,082

TOTAL LIABILITIES AND EQUITY

725,574

579,458

Approved for issue and signed on behalf of the Board of Directors on 11 November 2020.

_____________________

____________________

Constantinos Economides

Mary Trimithiotou

Director

Director

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

1

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

Note

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Interest income calculated using the effective

14

93,987

30,205

80,644

29,465

interest rate method

Other similar income

14

13

2

118

-

Interest expense calculated using the effective

14

(16,430)

(5,277)

(15,406)

(5,531)

interest rate method

Other similar expense

14

(110)

(36)

(107)

(39)

Expenses on deposit insurance

14

(1,258)

(457)

(1,331)

(487)

Net margin

14

76,202

24,437

63,918

23,408

Credit loss allowance for loans and advances to

8

(34,613)

(6,586)

(19,603)

(7,952)

customers and credit related commitments

Credit loss allowance (charge)/reversal for debt

(360)

(99)

225

83

securities at FVOCI

Total credit loss allowance for debt financial

(34,973)

(6,685)

(19,378)

(7,869)

instruments

Net margin after сredit loss allowance

41,229

17,752

44,540

15,539

Fee and commission income

15

33,393

12,973

25,696

9,359

Fee and commission expense

15

(14,699)

(5,688)

(10,636)

(3,974)

Customer acquisition expense

16

(13,591)

(5,473)

(13,888)

(4,049)

Net gains/(losses) from derivatives revaluation

6,678

3,720

(1,407)

(11)

Net (losses)/gains from foreign exchange translation

(8,743)

(4,242)

1,236

(451)

Net gains/(losses) from operations with foreign

1,211

291

(684)

(15)

currencies

Net gains from disposals of debt securities at FVOCI

6,787

538

277

137

Net gains from debt instruments at FVTPL

75

65

390

-

Insurance premiums earned

13,932

4,546

9,520

4,262

Insurance claims incurred

(2,904)

(795)

(3,282)

(1,374)

Administrative and other operating expenses

17

(25,244)

(8,859)

(20,461)

(7,394)

Net gains from repurchase of subordinated debt

168

18

-

-

Other operating income

2,405

1,087

866

435

Profit before tax

40,697

15,933

32,167

12,464

Income tax expense

(8,806)

(3,296)

(7,045)

(2,730)

Profit for the period

31,891

12,637

25,122

9,734

Other comprehensive (loss)/income

Items that may be reclassified to profit or loss

Debt securities at FVOCI and Repurchase

receivables:

- Net gains/(losses) arising during the period, net

1,929

(1,121)

3,760

1,126

of tax

- Net gains reclassified to profit or loss upon

(5,430)

(431)

(222)

(110)

disposal, net of tax

Other comprehensive (loss)/income for the

(3,501)

(1,552)

3,538

1,016

period, net of tax

Total comprehensive income for the period

28,390

11,085

28,660

10,750

Profit is attributable to:

- Shareholders of the Company

31,877

12,631

25,119

9,730

- Non-controlling interest

14

6

3

4

Total comprehensive income is attributable to:

28,376

11,079

28,657

10,746

- Shareholders of the Company

- Non-controlling interest

14

6

3

4

Earnings per share for profit attributable to the

Shareholders of the Company, basic

162.76

64.35

136.76

49.96

(expressed in RR per share)

Earnings per share for profit attributable to the

Shareholders of the Company, diluted

160.85

63.49

134.37

49.14

(expressed in RR per share)

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

2

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Changes in Equity

Attributable to shareholders of the Company

Non-

Total

Share

Share

Share-

Revaluation

Treasury

Retained

Total

capital

premium

based

reserve for

shares

earnings

control-

equity

Note

payment

investments in

ling

In millions of RR

reserve

debt securities

Interest

Balance at 1 January 2019

188

8,623

1,232

(1,144)

(3,670)

36,785

42,014

236

42,250

Profit for the period

-

-

-

-

-

25,119

25,119

3

25,122

Other comprehensive income:

Investments in debt securities at FVOCI and Repurchase receivables

-

-

-

3,538

-

-

3,538

-

3,538

Total comprehensive income for the period (Unaudited)

-

-

-

3,538

-

25,119

28,657

3

28,660

Shares issued

13

42

18,874

-

-

-

-

18,916

-

18,916

Secondary public offering costs

13

-

(499)

-

-

-

-

(499)

-

(499)

Acquisition of non-controlling interest in subsidiaries

-

-

-

-

-

(376)

(376)

(71)

(447)

Share-based payment reserve

13,23

-

-

(282)

-

506

156

380

-

380

Dividends declared

18

-

-

-

-

-

(5,870)

(5,870)

-

(5,870)

Balance at 30 September 2019 (Unaudited)

230

26,998

950

2,394

(3,164)

55,814

83,222

168

83,390

Balance at 1 January 2020

230

26,998

1,039

3,996

(3,164)

66,880

95,979

103

96,082

Profit for the period

-

-

-

-

-

31,877

31,877

14

31,891

Other comprehensive loss:

Investments in debt securities at FVOCI and Repurchase receivables

-

-

-

(3,501)

-

-

(3,501)

-

(3,501)

Total comprehensive (loss)/income for the period (Unaudited)

-

-

-

(3,501)

-

31,877

28,376

14

28,390

GDRs buy-back

13

-

-

-

-

(661)

-

(661)

-

(661)

Share-based payment reserve

13,23

-

-

(134)

-

587

(4)

449

-

449

Dividends declared

18

-

-

-

-

-

(7,773)

(7,773)

-

(7,773)

Balance at 30 September 2020 (Unaudited)

230

26,998

905

495

(3,238)

90,980

116,370

117

116,487

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

3

TCS Group Holding PLC

Consolidated Condensed Interim Statement of Cash Flows

Unaudited

Nine months

Nine months

ended

ended

Note

30 September

30 September

In millions of RR

2020

2019

Cash flows from operating activities

95,007

77,132

Interest income received calculated using the effective interest rate method

Other similar income received

11

175

Interest expense paid calculated using the effective interest rate method

8

(16,201)

(15,162)

Recoveries from written-off loans

2,777

2,440

Expenses on deposits insurance paid

(1,192)

(1,185)

Fees and commissions received

33,395

25,540

Fees and commissions paid

(14,444)

(11,016)

Customer acquisition expense paid

(12,305)

(14,771)

Gains/(losses) from operations with foreign currencies received/(paid)

103

(684)

Losses from operations with derivatives paid

(689)

(452)

Insurance premiums received

13,582

11,389

Insurance claims paid

(2,488)

(2,837)

Other operating income received

1,975

1,084

Administrative and other operating expenses paid

(19,953)

(17,681)

Income tax paid

(10,913)

(10,991)

Cash flows from operating activities before changes in operating

68,665

42,981

assets and liabilities

Changes in operating assets and liabilities

Net increase in CBRF mandatory reserves

(1,345)

(820)

Net decrease/(increase) in due from banks

202

(1,075)

Net increase in loans and advances to customers

(45,926)

(135,570)

Net (increase)/decrease in debt securities measured at FVTPL

(1,076)

5,781

Net decrease/(increase) in guarantee deposits with payment systems

125

(4,702)

Net decrease in other financial assets

4,612

4,053

Net (increase)/decrease in other non-financial assets

(582)

1,183

Net increase/(decrease) in due to banks

12,991

(1,835)

Net increase in customer accounts

80,814

68,933

Net (decrease)/increase in other financial liabilities

(641)

3,557

Net decrease in non-financial liabilities

(291)

(524)

Net cash from/(used in) operating activities

117,548

(18,038)

Cash flows (used in)/from investing activities

(1,118)

(1,526)

Acquisition of tangible fixed assets

Acquisition of intangible assets

(2,077)

(1,870)

Acquisition of investments in securities, repurchase receivables and other

investments

(362,000)

(64,221)

Proceeds from sale and redemption of investments in securities

269,327

64,614

Net cash used in investing activities

(95,868)

(3,003)

Cash flows (used in)/from financing activities

18

(8,076)

(5,618)

Dividends paid

Repayment of subordinated debt

(1,937)

-

Repayment of debt securities in issue

13

(813)

(3,200)

GDR's buy-back

(661)

-

Repayment of principal of lease liabilities

(563)

(987)

Proceeds of perpetual loan participation notes

710

46

Proceeds from debt securities in issue

-

21,615

Proceeds from secondary public offering

-

18,916

Secondary public offering costs paid

-

(451)

Net cash (used in)/from financing activities

(11,340)

30,321

Effect of exchange rate changes on cash and cash equivalents

5,345

(726)

Net increase in cash and cash equivalents

15,685

8,554

Cash and cash equivalents at the beginning of the period

7

57,796

33,802

Cash and cash equivalents at the end of the period

7

73,481

42,356

The notes № 1-24 are an integral part of this Consolidated Condensed Interim Financial Information.

4

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction

This consolidated condensed interim financial information for the nine months ended 30 September 2020 for TCS Group Holding PLC (the "Company") and its subsidiaries (together referred to as the "Group" or "TCS Group Holding PLC") has been prepared in accordance with International Accounting Standard 34 (IAS 34) "Interim Financial Reporting" as adopted by the European Union.

The Company was incorporated, and is domiciled, in Cyprus in accordance with the provisions of the Companies Law, Cap.113.

The Board of Directors of the Company at the date of authorisation of this consolidated condensed interim financial information consists of: Constantinos Economides, Alexios Ioannides, Mary Trimithiotou, Jacques Der Megreditchian and Martin Robert Cocker.

The Company Secretary is Caelion Secretarial Limited, 25 Spyrou Araouzou, 25 Berengaria, 5th floor, Limassol 3036, Cyprus.

At 30 September 2020 and 31 December 2019 the share capital of the Company is comprised of "class A" shares and "class B" shares. A "class A" share is an ordinary share with a nominal value of USD 0.04 per share and carrying one vote. A "class B" share is an ordinary share with a nominal value of USD 0.04 per share and carrying 10 votes. As at 30 September 2020 the number of issued "class A" shares is 119,291,268 and issued "class B" shares is 80,014,224 (31 December 2019: the same). Refer to Note 13 for further information on the share capital. On 25 October 2013 the Group completed an initial public offering of its "Class A" ordinary shares in the form of global depositary receipts (GDRs) listed on the London Stock Exchange plc. On 2 July 2019 the Group completed a secondary public offering (SPO) of its "class A" shares in the form of GDRs. Refer to Note 13 for the information about SPO. On 28 October 2019 the Group's GDRs started trading also on the Moscow Exchange.

As at 30 September 2020 and 31 December 2019 the entities and the individuals holding either Class A or Class B shares of the Company were:

Class of

30 September

31 December

Country of

shares

2020

2019

Incorporation

(Unaudited)

Guaranty Nominees Limited

(JP Morgan Chase Bank NA)

Class A

59.85%

59.85%

United Kingdom

Virtue Trustees (Switzerland) AG as Trustee

of the Bernina Trust

Class B

18.47%

-

Switzerland

Virtue Trustees (Switzerland) AG as Trustee

of the Rigi Trust

Class B

21.68%

-

Switzerland

Ioanna Georgiou

Class A

0.00%

0.00%

Cyprus

Panagiota Charalambous

Class A

0.00%

0.00%

Cyprus

Maria Vyra

Class A

0.00%

0.00%

Cyprus

Marios Panayides

Class A

0.00%

0.00%

Cyprus

Chloi Panagiotou

Class A

0.00%

0.00%

Cyprus

Leonora Chagianni

Class A

0.00%

0.00%

Cyprus

Altoville Holdings Limited

Class B

-

18.47%

Cyprus

Nemorenti Limited

Class B

-

21.68%

Cyprus

Total

100.00%

100.00%

Guaranty Nominees Limited is a company holding class A shares of the Company for which global depositary receipts are issued under a deposit agreement made between the Company and JP Morgan Chase Bank NA signed in October 2013.

On 19 March 2020 Altoville Holdings Limited and Nemorenti Limited transferred all of the Company's Class B shares owned by them to two Tinkov family trusts. Russian entrepreneur Mr. Oleg Tinkov, who was the beneficial owner of Altoville Holdings Limited and Nemorenti Limited at 31 December 2019, remains the ultimate beneficiary of these shares, and thus his voting rights are unaffected by this change. This change also has no consequences for or impact on the operations of the Company and its subsidiaries.

5

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction (Continued)

As at 30 September 2020 the six individuals listed above each hold one share. The individuals hold them as nominees of Mr. Oleg Tinkov (31 December 2019: as nominees of Altoville Holdings Limited).

As at 30 September 2020 and 31 December 2019 the ultimate controlling party of the Company is Mr. Oleg Tinkov. Mr. Oleg Tinkov controls approximately 87.03% of the aggregated voting rights attached to the Class A and B shares as at 30 September 2020 (31 December 2019: 87.03%) excluding voting rights attached to GDRs in TCS Group Holding PLC he holds, if any.

The subsidiaries of the Group are set out below. Except where stated the Group owns 100% of shares and has 100% of voting rights of each of these subsidiaries as at 30 September 2020 and 31 December 2019.

JSC "Tinkoff Bank" (the "Bank") provides on-line retail banking services in Russia. The Bank specialises in issuing credit cards and other credit products.

JSC "Tinkoff Insurance" (the "Insurance Company") provides insurance services such as accident, property, travellers, financial risks and auto insurance.

LLC "Microfinance company "Т-Finans" provides micro-finance services.

TCS Finance D.A.C. is a structured entity which issued debt securities including subordinated perpetual bonds for the Group. The Group neither owns shares nor has voting rights in this company. However, this entity was consolidated as it was specifically set up for the purposes of the Group, and the Group has exposure to substantially all risks and rewards through outstanding guarantees of the entity's obligations.

LLC "TCS" provides printing, distribution and other services to the Group.

LLC "Phoenix" is a debt collection agency.

LLC "Tinkoff Software DC" and LLC "Fintech DC" provide software development services. In August 2020 the Group disposed of LLC "Fintech DC" in exchange of 22.15% shareholding in Incantus Holding Limited (refer to Note 23).

LLC "Tinkoff Mobile" is a mobile virtual network operator set up in 2017 to provide mobile services.

LLC "CloudPayments" is a developer of online payment solutions whose core business is online merchant acquiring in Russia. As at 30 September 2020 and 31 December 2019 the Group held 95% of the shares of LLC "CloudPayments".

ANO "Tinkoff Education" is a non-commercial organization set up by the Bank as the sole founder.

LLC "Tinkoff Capital" is an asset management company established in June 2019 to manage investment funds, mutual funds and non-state pension funds.

LLC "Tinkoff Invest Lab" is an infrastructure company created for supporting and optimizing of the Group's investment services.

EBT is a special purpose trust which has been specifically created for the long-term incentive programme for Management of the Group (MLTIP). The Group neither owns shares nor has voting rights in EBT.

Principal activity. The Group's principal business activities are retail banking to private individuals, individual entrepreneurs' ("IE") and small and medium enterprises' ("SME") accounts and banking services, brokerage services and insurance operations within the Russian Federation through the Bank and the Insurance Company. The Bank operates under general banking license No. 2673 issued by the Central Bank of the Russian Federation ("CBRF") on 8 December 2006. The Insurance Company operates under an insurance license issued by the CBRF.

The Bank participates in the state deposit insurance scheme, which was introduced by Federal Law No. 177-FZ "Deposits insurance in banks of the Russian Federation" dated 23 December 2003.

6

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

1 Introduction (Continued)

The State Deposit Insurance Agency guarantees repayment of insurance compensation up to

  1. 1.4 million per individual, individual entrepreneur and small enterprise deposits in case of the withdrawal of a license of a bank or a CBRF-imposed moratorium on payments.

Registered address and place of business. The Company's registered address is 25 Spyrou Araouzou, Berengaria 25, 5th floor, Limassol, Cyprus, and place of business is Office 403, Lophitis Business Centre I, Corner of 28th October/Emiliou Chourmouziou Streets, Limassol 3035 Cyprus. The Bank's registered address is 1-st Volokolamsky proezd, 10, building 1, 123060, Moscow, Russian Federation. The Insurance Company's registered address is 2-nd Khutorskaya Street, building 38A, 127287, Moscow, Russian Federation. The Group's principal place of business is the Russian Federation.

Presentation currency. This consolidated condensed interim financial information is presented in millions of Russian Rubles (RR).

2 Operating Environment of the Group

Russian Federation. The Group operates mainly within the Russian Federation. There were a number of significant changes in the operating and economic environment during the first half of 2020, which had an impact on the Group's business including:

  • In March 2020 the World Health Organization (WHO) announced that the spread of the COVID-19 virus across the globe is a pandemic. Significant restrictions on travel and movement of individuals and the closure of non-essential businesses have either been imposed in most countries or have happened as a result of the pandemic. This has led to significant declines in GDP in most if not all large economically strong countries. Russia has not been immune to the negative personal and economic hardships arising from this virus and from the response to it trying to limit its spread.
  • Oil prices have decreased significantly due to the significant reduction in oil consumption in the current economic climate but demonstrated stable growth during the second quarter of 2020. This in turn has led to significant volatility and depreciation of the Russian Rouble exchange rate against the US dollar and the Euro.
  • Further, the capital markets (equities and bonds) have seen a substantial volatility in prices in many sectors.

As of the reporting date and subsequently some of the restrictions imposed by government authorities in the Russian Federation due to the COVID-19 pandemic have been lifted and the Group observes that business activity in the Russian Federation is recovering. However, the level of ongoing uncertainty in relation to further negative developments around the COVID-19 pandemic and possible impact on the Group remains high. Hence it is practically impossible to make a comprehensive quantitative assessment with a high degree of certainty of the impact of these changes to the economic environment on the Group's financial position, and in particular in considering credit loss allowances on the loan portfolio which requires to consider the probability of default of most borrowers in the next 12 months and for others over the life of their loan. Some other factors impacting on this are set out below.

The Government of the Russian Federation has implemented various support measures for individuals and corporates impacted by the COVID-19 pandemic including their right in certain circumstances to obtain repayment holidays on their loans for up to 6 months and reduced rates of interest in this period.

The Group has itself implemented several measures to support its clients, especially those who face financial difficulties and a significant decrease of current income due to the situation, including the below:

  • proposing internally developed loan restructuring programs as an alternative to the State announced programs which will result in either deferral or decrease in the minimal payments of outstanding loan balance for one or more months;
  • broadened cashback offers for debit cards more tailored to customer individual needs and spending behaviour;

7

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

2 Operating Environment of the Group (Continued)

  • provided several educational resources on its mobile app and website for borrowers to learn how to deal with potential unemployment or income decline, and how to request and obtain the most suitable debt restructuring program;
  • supported its small and medium-sized entities client base during the pandemic by lowering acquiring and account fees, offering payment holidays, helping SMEs to move online and launching 0% loans to pay salaries in partnership with the Russian Bank for SME support.

According to IFRS 9 "Financial Instruments", the Group uses forecast information in the expected credit loss models, including forecasts of macroeconomic indicators. For the purpose of calculating credit loss allowances as at 30 September 2020, the Group took into account expectations regarding the following macro-factors and allocated higher weight to the pessimistic macroeconomic scenario:

  • Russian stock market index MOEX;
  • Moscow Prime Offered Rate;
  • Debt load of Russian population based on statistics from bureaus of credit history.

In order to reflect appropriately the uncertainty associated with the COVID-19 pandemic the Group has made the following changes to their ECL model:

  • the macro-adjustment calculation approach was refined to reflect the most recent impact of economic developments;
  • an adjustment to the loss given default was made to address lower expected recoveries during the upcoming quarters;
  • higher probabilities of default were applied to the loans which have been restructured.

More detailed information about the changes and their impact on the results of the Group's operations for the nine months ended 30 September 2020 is disclosed in Note 4.

The management of the Group considers that the Group has demonstrated over the years and during the current COVID-crisis its ability to withstand shocks and retains its positive long-term outlook in particular due to the following advantages of the Group's business model:

  • using flexible business structure, the Group swiftly shifted some of its resources from businesses that were needed to run more conservatively to businesses with higher growth prospects;
  • the Group has a highly liquid, diversified, foreign exchange hedged, and well-capitalized balance sheet;
  • the Group's digital model is exactly what is needed in the current environment and this can be seen in the ongoing increased online payment volumes as well as increased take up of its mobile lifestyle app, current accounts, and brokerage business;
  • by mid-March 2020 over 95% of the Group's office-based employees had successfully moved to remote working, and remain so, without any major disruption to its business model and customer service. Approximately 2,500 smart couriers continue to deliver the Group's products all over Russia.

The Group regularly stress tests its business to assess the sustainability of its liquidity and capital positions. These tests demonstrate that Group's current levels of capital and liquidity are more than sufficient to absorb potential economic and operational shocks related to a second wave of the COVID-19 pandemic. The Group has a proven ability to organically replenish capital and liquidity buffers by slowing down Group's lending and customer acquisition activities, although it currently does not expect to do this for the rest of 2020.

While the number of positive COVID-19 cases continues to rise in Russia, the Group is not aware of any government intentions to re-impose extensive lockdown measures. But some extra measures are being implemented. For example, Moscow's mayor announced that it will limit, among other activities, operations of restaurants, entertainment venues, and public events.

8

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

2 Operating Environment of the Group (Continued)

Although such measures may have a negative impact on the Group's business, the management of the Group considers that the Group is well equipped to deal with such eventualities.

3 Significant Accounting Policies

Basis of preparation. This consolidated condensed interim financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union (EU) and should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2019 which have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, and the requirements of the Cyprus Companies Law, Cap. 113.

Except as described below, the same accounting policies and methods of computation were followed in the preparation of this consolidated condensed interim financial information as compared with the annual consolidated financial statements for the year ended 31 December 2019.

Cash-settled share-basedprogram. The expense is recognized gradually over the vesting period and is measured at the fair value of the liability at each end of the reporting period. The fair value of the liability reflects all vesting conditions, except for the requirement of the employee to stay in service which is reflected through the amortization schedule.

The liability is measured, initially and at the end of each reporting period until settled, at fair value, taking into account the terms and conditions on which the instruments were granted and the extent to which the employees have rendered service to date.

Interim period tax measurement. Interim period income tax expense is accrued using the effective tax rate that would be applicable to expected total annual earnings, that is, the estimated weighted average annual effective income tax rate applied to the pre-tax income of the interim period.

Seasonality. Management does not consider that the Group's business exhibits material differences due to seasonality.

Foreign currency translation. At 30 September 2020 the rate of exchange used for translating foreign currency balances was USD 1 = RR 79.6845 (31 December 2019: USD 1 = RR 61.9057), and the average rate of exchange was USD 1 = RR 70.7778 for the nine months ended 30 September 2020 and USD 1 = RR 73.5598 for the three months ended 30 September 2020 (nine months ended 30 September 2019: USD 1 = RR 65.0789, three months ended 30 September 2019: USD 1 = RR 64.5685).

Changes in presentation. In September 2020 as a result of a detailed review of the marketing agreements with the payment systems the Group changed its accounting policy in relation to income received under these agreements by reclassifying it from Other operating income to reduce the Payment System fees accounted for in Interest income and Fee and commission expenses. Part of the net payment system fees which relates to the borrowers' transactions is included in the effective interest income of the loans. Another part which relates to the customer's transactions was reclassified to Fee and commission expenses and presented on a net basis within the payment systems. Management considers that this reclassification results in a more reliable and relevant presentation of the substance of these agreements since such income from payment systems primarily represents volume rebates, hence it could be offset against related expenses. The net effect of this change in accounting policy on net income for prior periods was not significant and was adjusted in the consolidated condensed interim statement of profit or loss and other comprehensive income for the three months ended 30 September 2020.

In December 2019 the management of the Group made a detailed review of the components that make up interest income and identified one type of fee (payment channels fee) which now has more characteristics of being a service fee than being part of the effective interest income of the loans. The management considers that the reclassification of this fee to Fee and commission expense will result in a more reliable and relevant presentation of the financial information and is more consistent with the market practice of many other banks.

9

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

3 Significant Accounting Policies (Continued)

In 2019 the management of the Group improved the presentation of the results of operations with foreign currencies, derivatives revaluation and foreign exchange translation and disclosed separately in the consolidated condensed interim statement of profit or loss and other comprehensive income the following line items: Net gains/(losses) from derivatives revaluation, Net (losses)/gains from foreign exchange translation and Net gains/(losses) from operations with foreign currencies. Improvements were also made to the presentation of the cash flows from the insurance operations by disclosing separately in the consolidated condensed interim statement of cash flows the following line items: Gains/(losses) from operations with foreign currencies received/(paid), Losses from operations with derivatives paid, Premiums received from insurance operations and Claims paid from insurance operations.

Management considers that such improved and more detailed disclosure provides users of this consolidated condensed interim financial information with more relevant information.

The effect of changes described above on the consolidated condensed interim statement of profit or loss and other comprehensive income for the six months ended 30 June 2020 is as follows:

Unaudited

As

Reclassification

As

originally

reclassified

In millions of RR

presented

Six months ended 30 June 2020:

Interest income calculated using the effective interest rate

method

63,399

383

63,782

Fee and commission expense

(10,260)

1,249

(9,011)

Other operating income

2,950

(1,632)

1,318

The effect of changes described above on the consolidated condensed interim statement of profit or loss and other comprehensive income for the nine and three months ended 30 September 2019 is as follows:

Unaudited

As

Reclassification

As

originally

reclassified

In millions of RR

presented

Nine months ended 30 September 2019:

Interest income calculated using the effective interest rate

method

78,982

1,662

80,644

Fee and commission expense

(11,276)

640

(10,636)

Other operating income

3,168

(2,302)

866

Net gains/(losses) from derivatives revaluation

-

(1,407)

(1,407)

Net (losses)/gains from foreign exchange translation

-

1,236

1,236

Net gains/(losses) from operations with foreign currencies

(855)

171

(684)

Three months ended 30 September 2019:

Interest income calculated using the effective interest rate

method

28,841

624

29,465

Interest expense calculated using the effective interest rate method

(5,426)

(105)

(5,531)

Fee and commission expense

(4,040)

66

(3,974)

Customer acquisition expense

(4,154)

105

(4,049)

Other operating income

1,125

(690)

435

Net gains/(losses) from derivatives revaluation

-

(11)

(11)

Net (losses)/gains from foreign exchange translation

-

(451)

(451)

Net gains/(losses) from operations with foreign currencies

(477)

462

(15)

10

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

3 Significant Accounting Policies (Continued)

The effect of changes described above on the consolidated condensed interim statement of cash flows for the nine months ended 30 September 2019 is as follows:

Unaudited

As originally

Reclassification

As reclassified

In millions of RR

presented

Interest income received calculated using the effective

interest rate method

75,550

1,582

77,132

Fees and commissions paid

(11,425)

409

(11,016)

Other operating income received

3,075

(1,991)

1,084

Gains/(losses) from operations with foreign currencies

received/(paid)

(1,136)

452

(684)

Losses from operations with derivatives paid

-

(452)

(452)

Insurance premiums received

-

11,389

11,389

Insurance claims paid

-

(2,837)

(2,837)

Cash received from insurance operations

8,552

(8,552)

-

4 Critical Accounting Estimates and Judgements in Applying Accounting Policies

The Group makes estimates and assumptions that affect the amounts recognized in the consolidated condensed interim financial information and the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Management also makes certain judgements, apart from those involving estimations, in the process of applying the accounting policies. Judgements that have the most significant effect on the amounts recognized in the consolidated condensed interim financial information and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:

ECL measurement. Calculation and measurement of ECLs is an area of significant judgement and involves the use of complex models and data inputs. The following components of ECL calculation have a major impact on credit loss allowance: probability of default ("PD") (impacted by definition of default, SICR, forward-looking scenarios and their weights) and loss given default ("LGD").

The Group makes estimates and judgments, which are constantly analyzed based on statistical data, actual and forecast information, as well as management experience, including expectations regarding future events that are considered reasonable in the current circumstances.

In order to address rising credit risks the Group adjusted the main approaches to assessing the level of expected credit losses that have the most significant effect on the amounts recognised in the consolidated condensed interim financial information:

  • the macroeconomic model has become more conservative, based on different scenarios: base, optimistic and pessimistic, and higher weight is assigned to the pessimistic scenario;
  • for instruments in default the Group has applied increased coefficients of LGD;
  • the Group has estimated the volume of loans to individuals which were restructured as of the reporting date and applied higher PDs to such loans for the purposes of estimation of expected credit losses.

The impact of the changed macroeconomic conditions assessed using the approaches described above was approximately RR 5.4 billion of additional credit loss allowance charge for nine months ended 30 September 2020 and was the main driver of increased cost of risk. Given the unpredictability of current economic environment and uncertainty regarding its development the Group made a decision to keep macro-adjustment at current level.

11

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

4 Critical Accounting Estimates and Judgements in Applying Accounting Policies (Continued)

Also in the second quarter of 2020 for the purposes of LGD estimation the Group has refined the approach to calculation of the rate used for discounting expected cash flows from defaulted loans. The refined approach is that the Group uses more disaggregated and specific discount rates for each credit product in the overall loan portfolio of the Group rather than one generic rate, which makes the estimate more precise. The impact of this change comprised RR 0.9 billion of additional credit loss allowance charge.

In 2020 the Group has refined its approach to calculation of the impact of modification of original cash flows without derecognition on stage 3 loans credit loss allowance and gross carrying amount (refer to Note 8). In particular the Group refined the approach to estimation of timing of receipt of expected cash flows and related discounting effect. This refinement has not affected either amounts recognised in the consolidated condensed interim statement of profit or loss and other comprehensive income or the amounts recognised in consolidated condensed interim statement of financial position.

An increase or decrease in PDs by 2% compared to PDs used in the ECL estimates calculated at 30 September 2020 would result in an increase or decrease in credit loss allowances of RR 5.1 billion (31 December 2019: by 1% and RR 2.1 billion).

An increase or decrease in LGDs by 2% compared to LGDs used in the ECL estimates calculated at 30 September 2020 would result in an increase or decrease in credit loss allowances of RR 1.5 billion (31 December 2019: by 1% and RR 0.5 billion).

5 Adoption of New or Revised Standards and Interpretations

The following amended standards became effective from 1 January 2020, but did not have any material impact on the Group:

  • Interest rate benchmark reform - Amendments to IFRS 9, IAS 39 and IFRS 7 (issued on 26 September 2019 and effective for annual periods beginning on or after 1 January 2020).
  • Amendments to the Conceptual Framework for Financial Reporting (issued on 29 March 2018 and effective for annual periods beginning on or after 1 January 2020).
  • Definition of materiality - Amendments to IAS 1 and IAS 8 (issued on 31 October 2018 and effective for annual periods beginning on or after 1 January 2020).
  • Definition of a business - Amendments to IFRS 3 (issued on 22 October 2018 and effective for acquisitions from the beginning of annual reporting period that starts on or after 1 January 2020).

The following amendments became effective from 1 June 2020, but did not have any material impact on the Group:

Covid-19-Related Rent Concessions - Amendments to IFRS 16 (issued on 28 May 2020 and effective for annual periods beginning on or after 1 June 2020).

12

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

6 New Accounting Pronouncements

Certain new amendments have been issued that are mandatory for annual periods beginning on or after

1 January 2021:

IFRS 17 "Insurance Contracts"(issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2023)*. IFRS 17 replaces IFRS 4, which has given companies dispensation to carry on accounting for insurance contracts using existing practices. As a consequence, it was difficult for investors to compare and contrast the financial performance of otherwise similar insurance companies. IFRS 17 is a single principle-basedstandard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. The standard requires recognition and measurement of groups of insurance contracts at: (i) a risk-adjustedpresent value of the future cash flows (the fulfilment cash flows) that incorporates all of the available information about the fulfilment cash flows in a way that is consistent with observable market information; plus (if this value is a liability) or minus (if this value is an asset) (ii) an amount representing the unearned profit in the group of contracts (the contractual service margin). Insurers will be recognising the profit from a group of insurance contracts over the period they provide insurance coverage, and as they are released from risk. If a group of contracts is or becomes loss-making,an entity will be recognising the loss immediately. The Group is currently assessing the impact of IFRS 17 on the insurance contracts issued by the Insurance Company as well as the impact for credit cards and similar loan products which may include insurance component.

Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual periods beginning on or after 1 January 2023)*. The amendments relate to eight areas of IFRS 17, and they are not intended to change the fundamental principles of the standard. The following amendments to IFRS 17 were made: effective date, expected recovery of insurance acquisition cash flows, contractual service margin attributable to investment services, reinsurance contracts held - recovery of losses and other amendments.

The following other new pronouncements are not expected to have any material impact on the Group when adopted:

  1. Classification of liabilities as current or non-current, deferral of effective date - Amendments to IAS 1 (issued on 15 July 2020 and effective for annual periods beginning on or after 1 January 2023)*.
  2. Sale or contribution of assets between an Investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after a date to be determined by the IASB)*.
  3. Annual Improvements to IFRSs 2018-2020 - amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 and narrow scope amendments to IAS 16, IAS 37 and IFRS 3 (issued on 14 May 2020 and effective for annual periods beginning on or after 1 January 2022)*.
  4. Interest rate benchmark (IBOR) reform - phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (issued on 27 August 2020 and effective for annual periods beginning on or after 1 January 2021)*.
  • Denotes standards, interpretations and amendments which have not yet been endorsed by the European Union.

13

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

7 Cash and Cash Equivalents

30 September

31 December

2020

2019

In millions of RR

(Unaudited)

Cash on hand

15,201

11,118

Cash balances with the CBRF (other than mandatory reserve deposits)

18,424

16,599

Placements with other banks and non-bank credit organizations with

original maturities of less than three months

39,856

30,079

Total cash and cash equivalents

73,481

57,796

Cash on hand includes cash balances in ATMs and cash balances in transit. Placements with other banks and organizations with original maturities of less than three months include placements under reverse sale and repurchase agreements in the amount of RR 24,063 million as at 30 September 2020 (31 December 2019: RR 20,681 million). The Group has a right to sell or repledge securities received under reverse sale and repurchase agreements.

The carrying amount of cash and cash equivalents at 30 September 2020 and 31 December 2019 also represents the Group's maximum exposure to credit risk on these assets.

For the purpose of ECL measurement cash and cash equivalents balances are included in Stage 1. The ECL for these balances represents an immaterial amount, therefore the Group did not recognise any credit loss allowance for cash and cash equivalents. Except for reverse sale and repurchase agreements, amounts of cash and cash equivalents are not collateralised. As at 30 September 2020 the fair value of collateral under reverse sale and repurchase agreements was RR 24,031 million (31 December 2019:

  1. 22,369 million). There is no material impact of collateral on credit loss allowance for cash and cash equivalents. Refer to Note 22 for the disclosure of the fair value of cash and cash equivalents.

8

Loans and Advances to Customers

30 September

31 December

2020

2019

In millions of RR

(Unaudited)

Gross carrying amount of loans and advances to customers at AC

415,253

383,912

Less credit loss allowance

(70,374)

(54,737)

Total carrying amount of loans and advances to customers at AC

344,879

329,175

Loans and advances to customers at FVTPL

1,434

-

Total loans and advances to customers

346,313

329,175

Loans and advances to customers at FVTPL represent a loan that does not meet SPPI requirement and that was issued to related party (refer to Note 23).

14

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Gross carrying amount and credit loss allowance amount for loans and advances to customers at AC by classes at 30 September 2020 and 31 December 2019 are disclosed in the table below:

30 September 2020 (Unaudited)

31 December 2019

Gross

Credit

Carrying

Gross

Credit

Carrying

carrying

loss

amount

carrying

loss

amount

In millions of RR

amount

allowance

amount

allowance

Credit card loans

262,228

(55,512)

206,716

244,937

(44,129)

200,808

Cash loans

59,175

(10,149)

49,026

62,265

(8,029)

54,236

Other loans

93,850

(4,713)

89,137

76,710

(2,579)

74,131

- Secured loans

36,431

(977)

35,454

29,601

(496)

29,105

- POS loans

26,384

(1,487)

24,897

25,940

(1,057)

24,883

- Car loans

28,963

(1,853)

27,110

20,156

(913)

19,243

- Loans to IE and SME

2,072

(396)

1,676

1,013

(113)

900

Total loans and advances to

customers at AC

415,253

(70,374)

344,879

383,912

(54,737)

329,175

Credit cards are issued to customers for cash withdrawals or payment for goods or services, within the range of limits established by the Bank. These limits may be increased or decreased from time-to-time based on management decision. Credit card loans are not collateralized.

Cash loans represent a product for the borrowers who have a positive credit history and who do not have overdue loans in other banks. Cash loans are loans provided to customers via the Bank's debit cards. These loans are available for withdrawal without commission.

Secured loans represent loans secured with a car or real estate.

POS ("Point of sale") loans represent loans to fund online and offline purchases through internet and offline shops for individual borrowers.

Car loans represent loans for the purchase of a vehicle which is used as collateral under the loan.

Loans to IE and SME represent loans provided by the Bank to individual entrepreneurs and small and medium businesses for the purpose of working capital management.

The credit loss allowance for loans and advances to customers recognised in the period is impacted by a variety of factors. The main movements in the tables presented below are described as follows:

  • new originated or purchased category represents the gross carrying amounts and the related ECL of purchased loans and loans issued during the reporting period (and withdrawals of limits of new credit card borrowers) as at the end of the reporting period or as at the date of transfer of loan out of stage 1 (whichever date is earlier);
  • transfers between Stage 1, 2 and 3 due to balances experiencing significant increases (or decreases) of credit risk or becoming credit-impaired in the period, and the consequent "step up" (or "step down") between 12-month and lifetime ECL. Transfers present the amount of credit loss allowance charged or recovered at the moment of transfer of a loan among the respective stages;
  • changes to ECL measurement model assumptions and estimates represent movements due to changes in PDs, EADs and LGDs models during the period;
  • movements other than transfers and new originated or purchased loans category represent all other movements of ECL in particular related to changes in gross carrying amounts (including drawdowns, repayments, and accrued interest), as well as updates of inputs to ECL model in the period;
  • write-offsof allowances are related to assets that were written-off during the period;

15

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

  • unwinding of discount (for Stage 3) category represents adjustment to credit loss allowance and gross carrying amount for Stage 3 loans to increase it to discounted amount of the expected cash shortfalls to the reporting date using the effective interest rate.

The following tables disclose the changes in the credit loss allowance and gross carrying amount for loans and advances to customers between the beginning and the end of the reporting and comparative periods:

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Credit card loans

At 31 December 2019

11,704

6,853

25,572

44,129

197,796

11,432

35,373

336

244,937

Movements with impact

on credit loss allowance

charge for nine months

ended 30 September

2020

New originated or

purchased

2,760

-

-

2,760

31,786

-

-

161

31,947

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(3,136)

6,662

-

3,526

(14,042)

14,042

-

-

-

  • to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(4,018) (6,556)

23,159

12,585

(20,196) (9,399)

29,595

-

-

  • recovered (from Stage 3 to Stage 2 and from Stage

2 to Stage 1)

342

(779)

(26)

(463)

1,446

(1,415)

(31)

-

-

Changes to ECL

measurement model

assumptions and

estimates

2,840

300

1,336

4,476

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

5,823

1,963

(3,169)

4,617

5,485

(4)

(3,717)

(168)

1,596

Total movements with

impact on credit loss

allowance charge for

nine months ended

30 September 2020

4,611

1,590

21,300

27,501

4,479

3,224

25,847

(7)

33,543

Movements without

impact on credit loss

allowance charge for the

period

Unwinding of discount (for

Stage 3)

-

-

4,410

4,410

-

-

4,410

-

4,410

Write-offs

-

-

(10,036)

(10,036)

-

-

(10,036)

-

(10,036)

Sales

-

-

(1,017)

(1,017)

-

-

(1,151)

-

(1,151)

Modification of original

cash flows without

derecognition

-

-

(9,475)

(9,475)

-

-

(9,475)

-

(9,475)

At 30 September 2020

16,315

8,443

30,754

55,512

202,275

14,656

44,968

329

262,228

16

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12- (lifetime (lifetime originated

months

ECL)

ECL)

months

ECL)

ECL)

credit

In millions of RR

ECL)

ECL)

impaired

Credit card loans

At 30 June 2020

14,710

11,831

29,483

56,024

190,815

20,878

41,747

361

253,801

Movements with impact on

credit loss allowance

charge for three months

ended 30 September 2020

New originated or

purchased

786

-

-

786

12,022

-

-

23

12,045

Transfers:

- to lifetime (from Stage 1 to

Stage 2)

(2,087)

4,375

-

2,288

(9,057)

9,057

-

-

-

  • to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(168)

(7,412)

8,464

884

(642) (10,050)

10,692

-

-

  • recovered (from Stage 3 to Stage 2 and from Stage 2 to

Stage 1)

1,332

(2,365)

(67)

(1,100)

5,033

(4,950)

(83)

-

-

Changes to ECL

measurement model

assumptions and estimates

(144)

14

61

(69)

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

1,886

2,000

(1,242)

2,644

4,104

(279)

(1,402)

(55)

2,368

Total movements with

impact on credit loss

allowance charge for

three months ended

1,605

(3,388)

7,216

5,433

11,460

(6,222)

9,207

(32)

14,413

30 September 2020

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

1,276

1,276

-

-

1,276

-

1,276

Write-offs

-

-

(3,652)

(3,652)

-

-

(3,652)

-

(3,652)

Sales

-

-

(232)

(232)

-

-

(273)

-

(273)

Modification of original cash

flows without derecognition

-

-

(3,337)

(3,337)

-

-

(3,337)

-

(3,337)

At 30 September 2020

16,315

8,443

30,754

55,512

202,275

14,656

44,968

329

262,228

17

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR) credit im-

ECL)

SICR) credit im-

impaired

In millions of RR

paired)

paired)

Credit card loans

At 31 December 2018

9,266

4,708

19,322

33,296

145,732

6,654

25,497

107

177,990

Movements with impact on

credit loss allowance

charge for nine months

ended 30 September 2019

New originated or

purchased

3,994

-

-

3,994

48,653

-

-

128

48,781

Transfers:

- to lifetime (from Stage 1 to

Stage 2)

(2,512)

6,221

-

3,709

(10,515)

10,515

-

-

-

  • to credit-impaired (from Stage 1 and Stage 2 to

Stage 3)

(2,988)

(3,994) 15,042

8,060

(13,303)

(5,140) 18,443

-

-

  • recovered (from Stage 3 to Stage 2 and from Stage 2 to

Stage 1)

251

(794)

(15)

(558)

1,167

(1,149)

(18)

-

-

Changes to ECL

measurement model

assumptions and estimates

(387)

-

-

(387)

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

3,595

916

(3,407)

1,104

24,048

257

(4,025)

(8)

20,272

Total movements with

impact on credit loss

allowance charge for nine

months ended

1,953

2,349

11,620

15,922

50,050

4,483

14,400

120

69,053

30 September 2019

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

2,175

2,175

-

-

2,175

-

2,175

Write-offs

-

-

(8,656)

(8,656)

-

-

(8,656)

-

(8,656)

Sales

-

-

(739)

(739)

-

-

(843)

-

(843)

Modification of original cash

flows without derecognition

-

-

(1,559)

(1,559)

-

-

(1,559)

-

(1,559)

At 30 September 2019

11,219

7,057

22,163

40,439

195,782

11,137

31,014

227

238,160

18

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

im-

im-

In millions of RR

paired)

paired)

Credit card loans

At 30 June 2019

10,392

6,489

19,479

36,360

185,036

9,767

27,211

221

222,235

Movements with impact on

credit loss allowance

charge for three months

ended 30 September 2019

New originated or

purchased

551

-

-

551

10,567

-

-

45

10,612

Transfers:

- to lifetime (from Stage 1 to

Stage 2)

(2,144)

5,370

-

3,226

(9,094)

9,094

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(259)

(4,878)

6,054

917

(1,109)

(6,428)

7,537

-

-

- recovered (from Stage 3

to Stage 2 and from Stage

2 to Stage 1)

367

(1,097)

(33)

(763)

1,778

(1,738)

(40)

-

-

Changes to ECL

measurement model

assumptions and estimates

-

-

-

-

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

2,312

1,173

(1,111)

2,374

8,604

442

(1,431)

(39)

7,576

Total movements with

impact on credit loss

allowance charge for

three months ended

827

568

4,910

6,305

10,746

1,370

6,066

6

18,188

30 September 2019

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

932

932

-

-

932

-

932

Write-offs

-

-

(2,385)

(2,385)

-

-

(2,385)

-

(2,385)

Sales

-

-

(222)

(222)

-

-

(259)

-

(259)

Modification of original cash

flows without derecognition

-

-

(551)

(551)

-

-

(551)

-

(551)

At 30 September 2019

11,219

7,057

22,163

40,439

195,782

11,137

31,014

227

238,160

19

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Cash loans

At 31 December 2019

2,358

1,882

3,789

8,029

51,925

5,034

4,670

636

62,265

Movements with impact on

credit loss allowance

charge for nine months

ended 30 September 2020

New originated or

purchased

1,589

-

-

1,589

24,061

-

-

35

24,096

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(736)

3,125

-

2,389

(5,177)

5,177

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(1,042)

(1,705)

4,703

1,956

(3,084)

(2,178)

5,262

-

-

- recovered (from Stage 3

to Stage 2 and from Stage

2 to Stage 1)

64

(262)

(3)

(201)

1,046

(1,043)

(3)

-

-

Changes to ECL

measurement model

assumptions and

estimates

813

110

176

1,099

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

238

(885)

(612)

(1,259)

(21,755)

(1,543)

(143)

(268)

(23,709)

Total movements with

impact on credit loss

allowance charge for

nine months ended

30 September 2020

926

383

4,264

5,573

(4,909)

413

5,116

(233)

387

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

366

366

-

-

366

-

366

Write-offs

-

-

(1,638)

(1,638)

-

-

(1,638)

-

(1,638)

Sales

-

-

(315)

(315)

-

-

(339)

-

(339)

Modification of original

cash flows without

derecognition

-

-

(1,866)

(1,866)

-

-

(1,866)

-

(1,866)

At 30 September 2020

3,284

2,265

4,600

10,149

47,016

5,447

6,309

403

59,175

20

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL)

ECL)

months

ECL)

ECL)

credit

In millions of RR

ECL)

ECL)

impaired

Cash loans

At 30 June 2020

3,315

2,828

4,204

10,347

46,489

6,592

5,663

607

59,351

Movements with impact on

credit loss allowance

charge for three months

ended 30 September 2020

New originated or

purchased

653

-

-

653

11,380

-

-

31

11,411

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(386)

1,567

-

1,181

(2,557)

2,557

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(96)

(1,348)

1,556

112

(198)

(1,574)

1,772

-

-

- recovered (from Stage 3

to Stage 2 and from Stage

2 to Stage 1)

96

(364)

(14)

(282)

1,358

(1,343)

(15)

-

-

Changes to ECL

measurement model

assumptions and

estimates

(17)

(5)

35

13

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

(281)

(413)

(117)

(811)

(9,456)

(785)

(40)

(235)

(10,516)

Total movements with

impact on credit loss

allowance charge for

three months ended

(31)

(563)

1,460

866

527

(1,145)

1,717

(204)

895

30 September 2020

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

149

149

-

-

149

-

149

Write-offs

-

-

(664)

(664)

-

-

(664)

-

(664)

Sales

-

-

(86)

(86)

-

-

(93)

-

(93)

Modification of original

cash flows without

derecognition

-

-

(463)

(463)

-

-

(463)

-

(463)

At 30 September 2020

3,284

2,265

4,600

10,149

47,016

5,447

6,309

403

59,175

21

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit im-

ECL)

SICR)

credit im-

impaired

In millions of RR

paired)

paired)

Cash loans

At 31 December 2018

1,116

545

670

2,331

32,651

1,776

767

301

35,495

Movements with impact

on credit loss allowance

charge for nine months

ended 30 September

2019

New originated or

purchased loans

2,091

-

-

2,091

42,027

-

-

154

42,181

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(487)

2,543

-

2,056

(5,038)

5,038

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(547)

(496)

2,583

1,540

(2,126)

(640)

2,766

-

-

- recovered (from Stage 3

to Stage 2 and from Stage

2 to Stage 1)

14

(76)

-

(62)

419

(419)

-

-

-

Changes to ECL

measurement model

assumptions and

estimates

(22)

-

-

(22)

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

56

(745)

86

(603)

(13,203)

(993)

340

(123)

(13,979)

Total movements with

impact on credit loss

allowance charge for

nine months ended

30 September 2019

1,105

1,226

2,669

5,000

22,079

2,986

3,106

31

28,202

Movements without

impact on credit loss

allowance charge for the

period

Unwinding of discount (for

Stage 3)

-

-

91

91

-

-

91

-

91

Write-offs

-

-

(305)

(305)

-

-

(305)

-

(305)

Sales

-

-

(83)

(83)

-

-

(89)

-

(89)

Modification of original

cash flows without

derecognition

-

-

(327)

(327)

-

-

(327)

-

(327)

At 30 September 2019

2,221

1,771

2,715

6,707

54,730

4,762

3,243

332

63,067

22

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)credit im-

ECL)

SICR)

credit im-

impaired

In millions of RR

paired)

paired)

Cash loans

At 30 June 2019

1,922

1,450

1,675

5,047

54,396

4,229

1,984

283

60,892

Movements with impact

on credit loss allowance

charge for three months

ended 30 September

2019

New originated or

purchased loans

465

-

-

465

11,741

-

-

90

11,831

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(389)

1,648

-

1,259

(3,121)

3,121

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(119)

(870)

1,331

342

(336)

(1,100)

1,436

-

-

- recovered (from Stage 3

to Stage 2 and from Stage

2 to Stage 1)

33

(164)

(2)

(133)

960

(958)

(2)

-

-

Movements other than

transfers and new

originated or purchased

loans

309

(293)

(31)

(15)

(8,910)

(530)

85

(41)

(9,396)

Total movements with

impact on credit loss

allowance charge for

three months ended

30 September 2019

299

321

1,298

1,918

334

533

1,519

49

2,435

Movements without

impact on credit loss

allowance charge for the

period

Unwinding of discount (for

Stage 3)

-

-

39

39

-

-

39

-

39

Write-offs

-

-

(137)

(137)

-

-

(137)

-

(137)

Sales

-

-

(24)

(24)

-

-

(26)

-

(26)

Modification of original

cash flows without

derecognition

-

-

(136)

(136)

-

-

(136)

-

(136)

At 30 September 2019

2,221

1,771

2,715

6,707

54,730

4,762

3,243

332

63,067

23

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

The following table discloses the changes in the credit loss allowance and gross carrying amount between the beginning and the end of the reporting periods for secured loans, POS loans, car loans and loans to IE and SME combined as the amount of such changes for these products is not significant.

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12- (lifetime (lifetime originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Other loans

At 31 December 2019

873

749

957

2,579

71,062

4,171

1,279

198

76,710

Movements with impact

on credit loss allowance

charge for nine months

ended 30 September

2020

New originated or

purchased

803

-

-

803

50,720

-

-

58

50,778

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(260)

2,182

-

1,922

(6,964)

6,964

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(247)

(568)

1,779

964

(1,497)

(970)

2,467

-

-

- recovered (from Stage 3

to Stage 2 and from

Stage 2 to Stage 1)

15

(101)

(4)

(90)

1,040

(1,031)

(9)

-

-

Changes to ECL

measurement model

assumptions and

estimates

242

15

22

279

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

122

(1,067)

(208)

(1,153)

(30,591)

(2,189)

(219)

(46)

(33,045)

Total movements with

impact on credit loss

allowance charge for

nine months ended

30 September 2020

675

461

1,589

2,725

12,708

2,774

2,239

12

17,733

Movements without

impact on credit loss

allowance charge for the

period

Unwinding of discount (for

Stage 3)

-

-

119

119

-

-

119

-

119

Write-offs

-

-

(281)

(281)

-

-

(281)

-

(281)

Sales

-

-

(37)

(37)

-

-

(39)

-

(39)

Modification of original

cash flows without

derecognition

-

-

(392)

(392)

-

-

(392)

-

(392)

At 30 September 2020

1,548

1,210

1,955

4,713

83,770

6,945

2,925

210

93,850

24

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-

(lifetime

(lifetime

(12-

(lifetime

(lifetime

originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Other loans

At 30 June 2020

1,392

1,363

1,640

4,395

71,803

7,408

2,419

210

81,840

Movements with impact

on credit loss allowance

charge for nine months

ended 30 September

2020

New originated or

purchased

419

-

-

419

27,250

-

-

41

27,291

Transfers:

- to lifetime (from Stage 1

to Stage 2)

(109)

972

-

863

(3,072)

3,072

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(24)

(481)

620

115

(104)

(758)

862

-

-

- recovered (from Stage 3

to Stage 2 and from

Stage 2 to Stage 1)

24

(175)

(12)

(163)

1,750

(1,724)

(26)

-

-

Changes to ECL

measurement model

assumptions and

estimates

(8)

(7)

(5)

(20)

-

-

-

-

-

Movements other than

transfers and new

originated or purchased

loans

(146)

(462)

(89)

(697)

(13,857)

(1,053)

(131)

(41)

(15,082)

Total movements with

impact on credit loss

allowance charge for

nine months ended

30 September 2020

156

(153)

514

517

11,967

(463)

705

-

12,209

Movements without

impact on credit loss

allowance charge for the

period

Unwinding of discount (for

Stage 3)

-

-

53

53

-

-

53

-

53

Write-offs

-

-

(135)

(135)

-

-

(135)

-

(135)

Sales

-

-

(10)

(10)

-

-

(10)

-

(10)

Modification of original

cash flows without

derecognition

-

-

(107)

(107)

-

-

(107)

-

(107)

At 30 September 2020

1,548

1,210

1,955

4,713

83,770

6,945

2,925

210

93,850

25

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3 Purchased/

Total

(12-

(lifetime

(lifetime

(12- (lifetime (lifetime originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Other loans

At 31 December 2018

274

117

203

594

20,287

607

226

105

21,225

Movements with impact on

credit loss allowance charge

for nine months ended 30

September 2019

New originated or purchased

687

-

-

687

49,792

-

-

37

49,829

Transfers:

- to lifetime (from Stage 1 to

Stage 2)

(120)

997

-

877

(3,368)

3,368

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(97)

(116)

639

426

(612)

(166)

778

-

-

- recovered (from Stage 3 to

Stage 2 and from Stage 2 to

Stage 1)

1

(10)

-

(9)

141

(141)

-

-

-

Changes to ECL

measurement model

assumptions and estimates

(4)

-

-

(4)

-

-

-

-

-

Movements other than

transfers and new originated

or purchased loans

(20)

(444)

(67)

(531)

(2,238)

(877)

(51)

(43)

(3,209)

Total movements with

impact on credit loss

allowance charge for nine

months ended

30 September 2019

447

427

572

1,446

43,715

2,184

727

(6)

46,620

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

28

28

-

-

28

-

28

Write-offs

-

-

(89)

(89)

-

-

(89)

-

(89)

Sales

-

-

(16)

(16)

-

-

(18)

-

(18)

Modification of original cash

flows without derecognition

-

-

(35)

(35)

-

-

(35)

-

(35)

At 30 September 2019

721

544

663

1,928

64,002

2,791

839

99

67,731

26

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Unaudited

Credit loss allowance

Gross carrying amount

Stage 1

Stage 2

Stage 3

Total

Stage 1

Stage 2

Stage 3 Purchased/

Total

(12-

(lifetime

(lifetime

(12- (lifetime (lifetime originated

months

ECL for

ECL for

months

ECL for

ECL for

credit

ECL)

SICR)

credit

ECL)

SICR)

credit

impaired

In millions of RR

impaired)

impaired)

Other loans

At 30 June 2019

547

377

420

1,344

47,263

2,059

499

101

49,922

Movements with impact on

credit loss allowance charge

for three months ended 30

September 2019

New originated or purchased

312

-

-

312

26,913

-

-

25

26,938

Transfers:

- to lifetime (from Stage 1 to

Stage 2)

(90)

651

-

561

(2,139)

2,139

-

-

-

- to credit-impaired (from

Stage 1 and Stage 2 to

Stage 3)

(20)

(206)

317

91

(105)

(300)

405

-

-

- recovered (from Stage 3 to

Stage 2 and from Stage 2 to

Stage 1)

5

(39)

(1)

(35)

548

(544)

(4)

-

-

Movements other than

transfers and new originated

or purchased loans

(33)

(239)

(36)

(308)

(8,478)

(563)

(23)

(27)

(9,091)

Total movements with

impact on credit loss

allowance charge for three

months ended

30 September 2019

174

167

280

621

16,739

732

378

(2)

17,847

Movements without impact

on credit loss allowance

charge for the period

Unwinding of discount (for

Stage 3)

-

-

15

15

-

-

15

-

15

Write-offs

-

-

(39)

(39)

-

-

(39)

-

(39)

Sales

-

-

(4)

(4)

-

-

(5)

-

(5)

Modification of original cash

flows without derecognition

-

-

(9)

(9)

-

-

(9)

-

(9)

At 30 September 2019

721

544

663

1,928

64,002

2,791

839

99

67,731

27

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

The credit loss allowance charge during the nine months ended 30 September 2020 presented in the tables above differs from the amount presented in the consolidated condensed interim statement of profit or loss and other comprehensive income for the period due to RR 2,777 million recovery of amounts previously written-off as uncollectible (three months ended 30 September 2020: RR 988 million), and due to

  1. 1,591 million charge of ECL for credit related commitments, including RR 443 million of charge due to changes to ECL measurement model assumptions and estimates (three months ended 30 September 2020: due to RR 758 million charge of ECL for credit related commitments).

The credit loss allowance charge during the nine months ended 30 September 2019 presented in the tables above differs from the amount presented in the consolidated condensed interim statement of profit or loss and other comprehensive income for the period due to RR 2,440 million recovery of amounts previously written-off as uncollectible (three months ended 30 September 2019: recovery of RR 838 million), and due to RR 325 million release of ECL for credit related commitments (three months ended 30 September 2019: release of RR 54 million).

The amount of the recovery from written-off loans received during the period was credited directly to the credit loss allowance line in the consolidated condensed interim statement of profit or loss and other comprehensive income.

The contractual amounts outstanding of loans and advances to customers which were written off during the nine and three months ended 30 September 2020 and are still subject to enforcement activity are equal to RR 10,017 million and RR 3,597 million, respectively (RR 7,853 million during the nine months ended 30 September 2019 and RR 2,213 million during the three months ended 30 September 2019).

The amount of the ECL for credit related commitments is accounted for separately from ECL for credit cards loans and is included in other financial liabilities in the consolidated condensed interim statement of financial position.

During the nine months ended 30 September 2020 the Group sold credit-impaired loans to third parties (external debt collection agencies) with a gross amount of RR 1,529 million (three months ended 30 September 2020: RR 376 million) and credit loss allowance of RR 1,369 million (three months ended 30 September 2020: RR 328 million). The difference between the carrying amount of these loans and the consideration received was recognised as losses in the amount of RR 134 million within credit loss allowance for loans and advances to customers and credit related commitments for the nine months ended 30 September 2020 (three months ended 30 September 2020: RR 41 million as losses).

During the nine months ended 30 September 2019 the Group sold credit-impaired loans to third parties (external debt collection agencies) with a gross amount of RR 950 million (three months ended 30 September 2019: RR 290 million) and credit loss allowance of RR 838 million (three months ended 30 September 2019: RR 250 million). The difference between the carrying amount of these loans and the consideration received was recognised as losses in the amount of RR 53 million within credit loss allowance for loans and advances to customers for the nine months ended 30 September 2019 (three months ended 30 September 2019: RR 18 million as losses).

28

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Presented below is an analysis of issued, activated and utilised cards based on their credit card limits as at the end of the reporting period:

30 September 2020

In units

(Unaudited)

31 December 2019

Credit card limits

Up to RR 20 thousand

970,459

781,128

RR 20-40 thousand

513,501

482,343

RR 40-60 thousand

474,160

451,425

RR 60-80 thousand

472,860

455,978

RR 80-100 thousand

449,227

440,139

RR 100-120 thousand

306,386

322,726

RR 120-140 thousand

344,376

365,750

RR 140-200 thousand

827,486

772,992

More than RR 200 thousand

207,017

180,731

Total number of cards (in units)

4,565,472

4,253,212

Table above only includes credit cards less than 180 days overdue.

The following table contains an analysis of the credit risk exposure of loans and advances to customers measured at AC and for which an ECL allowance is recognised. The carrying amount of loans and advances to customers below also represents the Group's maximum exposure to credit risk on these loans.

Loans and advances to customers at 30 September 2020 are disclosed as follows:

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime ECL

(lifetime ECL

originated

ECL)

for SICR)

for credit

credit

In millions of RR

impaired)

impaired

Credit card loans

- Excellent

67,692

-

-

-

67,692

- Good

125,945

3,874

-

-

129,819

- Monitor

8,638

4,610

-

-

13,248

- Sub-standard

-

6,172

8,214

-

14,386

- NPL

-

-

36,754

329

37,083

Gross carrying amount

202,275

14,656

44,968

329

262,228

Credit loss allowance

(16,315)

(8,443)

(30,754)

-

(55,512)

Carrying amount

185,960

6,213

14,214

329

206,716

29

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime ECL

(lifetime ECL

originated

ECL)

for SICR)

for credit

credit

In millions of RR

impaired)

impaired

Cash loans

- Excellent

27,183

-

-

-

27,183

- Good

19,523

3,696

-

-

23,219

- Monitor

310

790

-

-

1,100

- Sub-standard

-

961

924

-

1,885

- NPL

-

-

5,385

403

5,788

Gross carrying amount

47,016

5,447

6,309

403

59,175

Credit loss allowance

(3,284)

(2,265)

(4,600)

-

(10,149)

Carrying amount

43,732

3,182

1,709

403

49,026

Secured Loans

- Excellent

18,986

-

-

-

18,986

- Good

12,612

3,013

-

-

15,625

- Monitor

162

598

-

-

760

- Sub-standard

-

311

-

-

311

- NPL

-

-

749

-

749

Gross carrying amount

31,760

3,922

749

-

36,431

Credit loss allowance

(201)

(478)

(298)

-

(977)

Carrying amount

31,559

3,444

451

-

35,454

POS loans

- Excellent

19,620

-

-

-

19,620

- Good

4,390

729

-

-

5,119

- Monitor

130

143

-

-

273

- Sub-standard

-

135

28

-

163

- NPL

-

-

999

210

1,209

Gross carrying amount

24,140

1,007

1,027

210

26,384

Credit loss allowance

(432)

(200)

(855)

-

(1,487)

Carrying amount

23,708

807

172

210

24,897

30

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime

(lifetime ECL

originated

ECL)

ECL for

for credit

credit

In millions of RR

SICR)

impaired)

impaired

Car loans

- Excellent

19,055

-

-

-

19,055

- Good

6,765

1,393

-

-

8,158

- Monitor

132

334

-

-

466

- Sub-standard

-

261

-

-

261

- NPL

-

-

1,023

-

1,023

Gross carrying amount

25,952

1,988

1,023

-

28,963

Credit loss allowance

(638)

(521)

(694)

-

(1,853)

Carrying amount

25,314

1,467

329

-

27,110

Loans to IE and SME

- Excellent

1,131

-

-

-

1,131

- Good

782

10

-

-

792

- Monitor

5

11

-

-

16

- Sub-standard

-

7

-

-

7

- NPL

-

-

126

-

126

Gross carrying amount

1,918

28

126

-

2,072

Credit loss allowance

(277)

(11)

(108)

-

(396)

Carrying amount

1,641

17

18

-

1,676

Loans and advances to customers at 31 December 2019 are disclosed as follows:

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime ECL

(lifetime ECL

originated

ECL)

for SICR)

for credit

credit

In millions of RR

impaired)

impaired

Credit card loans

- Excellent

87,716

-

-

-

87,716

- Good

102,020

1,582

-

-

103,602

- Monitor

8,060

3,722

-

-

11,782

- Sub-standard

-

6,128

6,661

-

12,789

- NPL

-

-

28,712

336

29,048

Gross carrying amount

197,796

11,432

35,373

336

244,937

Credit loss allowance

(11,704)

(6,853)

(25,572)

-

(44,129)

Carrying amount

186,092

4,579

9,801

336

200,808

31

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime ECL

(lifetime ECL

originated

ECL)

for SICR)

for credit

credit

In millions of RR

impaired)

impaired

Cash loans

- Excellent

34,258

-

-

-

34,258

- Good

17,321

3,315

-

-

20,636

- Monitor

346

585

-

-

931

- Sub-standard

-

1,134

758

-

1,892

- NPL

-

-

3,912

636

4,548

Gross carrying amount

51,925

5,034

4,670

636

62,265

Credit loss allowance

(2,358)

(1,882)

(3,789)

-

(8,029)

Carrying amount

49,567

3,152

881

636

54,236

Secured Loans

- Excellent

19,941

-

-

-

19,941

- Good

7,319

1,496

-

-

8,815

- Monitor

106

322

-

-

428

- Sub-standard

-

219

-

-

219

- NPL

-

-

198

-

198

Gross carrying amount

27,366

2,037

198

-

29,601

Credit loss allowance

(150)

(264)

(82)

-

(496)

Carrying amount

27,216

1,773

116

-

29,105

POS loans

- Excellent

19,525

-

-

-

19,525

- Good

4,406

763

-

-

5,169

- Monitor

100

117

-

-

217

- Sub-standard

-

173

26

-

199

- NPL

-

-

632

198

830

Gross carrying amount

24,031

1,053

658

198

25,940

Credit loss allowance

(298)

(190)

(569)

-

(1,057)

Carrying amount

23,733

863

89

198

24,883

32

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

8 Loans and Advances to Customers (Continued)

Stage 1

Stage 2

Stage 3

Purchased/

Total

(12-months

(lifetime ECL

(lifetime ECL

originated

ECL)

for SICR)

for credit

credit

In millions of RR

impaired)

impaired

Car loans

- Excellent

15,581

-

-

-

15,581

- Good

3,051

702

-

-

3,753

- Monitor

93

157

-

-

250

- Sub-standard

-

201

-

-

201

- NPL

-

-

371

-

371

Gross carrying amount

18,725

1,060

371

-

20,156

Credit loss allowance

(368)

(285)

(260)

-

(913)

Carrying amount

18,357

775

111

-

19,243

Loans to IE and SME

- Excellent

622

-

-

-

622

- Good

314

6

-

-

320

- Monitor

4

6

-

-

10

- Sub-standard

-

9

-

-

9

- NPL

-

-

52

-

52

Gross carrying amount

940

21

52

-

1,013

Credit loss allowance

(57)

(10)

(46)

-

(113)

Carrying amount

883

11

6

-

900

Stage 3 includes restructured loans that are less than 90 days overdue which are not considered as NPL according to the Group's credit risk grading master scale.

Loans in courts are included in Stage 3 and are loans to delinquent borrowers, against which the Group has filed claims to courts in order to recover outstanding balances. As at 30 September 2020 the gross carrying amount of the loans in courts was RR 29,463 million (31 December 2019: RR 22,228 million).

Refer to Note 22 for the disclosure of the fair value of loans and advances to customers. Information on related party balances is disclosed in Note 23.

9

Investments in Securities

30 September 2020

31 December

In millions of RR

(Unaudited)

2019

Debt securities measured at fair value through other comprehensive

231,636

134,765

income

Securities measured at fair value through profit or loss

1,455

413

Total investments in securities

233,091

135,178

33

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

9 Investments in Securities (Continued)

  1. Debt securities measured at fair value through other comprehensive income

The table below discloses investments in debt securities measured at FVOCI by classes:

30 September 2020

31 December

In millions of RR

(Unaudited)

2019

Russian government bonds

118,697

56,382

Corporate bonds

100,274

72,032

Municipal bonds

8,110

6,351

Foreign government bonds

4,555

-

Total debt securities measured at FVOCI

231,636

134,765

Including credit loss allowance

694

345

The debt securities measured at FVOCI are not collateralised.

  1. Securities measured at fair value through profit or loss

The table below discloses investments in debt securities measured at FVTPL by classes:

30 September 2020

31 December

In millions of RR

(Unaudited)

2019

Perpetual corporate bonds

1,455

-

Other securities

-

413

Total securities measured at FVTPL

1,455

413

At 31 December 2019 the other securities were represented by assets of the mutual funds which were controlled by the Group and managed by LLC "Tinkoff Capital". These assets were sold at 30 September 2020.

Investments in securities measured at FVTPL are carried at fair value, which also reflects any credit risk related write-downs and best represents Group's maximum exposure to credit risk. The securities measured at FVTPL are not collateralized. Refer to Note 22 for the disclosure of the fair value of investments in securities.

10 Repurchase Receivables

Repurchase receivables represent securities sold under sale and repurchase agreements which the counterparty has the right, by contract or custom, to sell or repledge. As at 30 September 2020 the sale and repurchase agreements are short-term and mature in October 2020. Repurchase receivables represent securities at FVOCI sold under sale and repurchase agreements:

30 September 2020

In millions of RR

(Unaudited)

Russian government bonds

5,048

Total debt securities measured at FVOCI

5,048

Including Credit loss allowance

11

34

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

10 Repurchase Receivables (Continued)

At 31 December 2019 there were no repurchase receivables. Refer to Note 11 for the related liabilities. Refer to Note 22 for the disclosure of the fair value of each class of repurchase receivables. Securities at FVOCI reclassified to repurchase receivables continue to be carried at fair value in accordance with accounting policies for these categories of assets.

11

Due to Banks

30 September 2020

31 December

In millions of RR

(Unaudited)

2019

Sale and repurchase agreements with other banks

7,160

640

Correspondent accounts and overnight placements of other banks

6,948

23

Total due to banks

14,108

663

At 30 September 2020, included in the amounts due to other banks are liabilities of RR 4,797 million (31 December 2019: nil) arising from sale and repurchase agreements with debt securities at FVOCI. Refer to Note 10.

At 30 September 2020, included in the amounts due to other banks are liabilities of RR 2,363 million (31 December 2019: RR 640 million) arising from sale and repurchase agreements with securities of clients.

Refer to Note 22 for the disclosure of the fair value of amounts due to banks.

12

Customer Accounts

30 September 2020

31 December

In millions of RR

(Unaudited)

2019

Individuals

- Current/demand accounts

302,182

211,661

- Term deposits

138,649

137,292

IE and SME

- Current/demand accounts

69,278

60,174

- Term deposits

1,764

1,880

Other legal entities

- Current/demand accounts

1,409

495

- Term deposits

144

112

Total customer accounts

513,426

411,614

Refer to Note 22 for the disclosure of the fair value of customer accounts. Information on related party balances is disclosed in Note 23.

35

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

13 Share Capital, Share Premium and Treasury Shares

Number of

Number of

Ordinary

Share

Treasury

Total

In millions of RR except for

authorised

outstanding

shares

premium

shares

the number of shares

shares

shares

At 1 January 2019

191,770,766

182,638,825

188

8,623

(3,670)

5,141

Shares issued

18,263,882

16,666,667

42

18,874

-

18,916

Secondary public offering

(SPO) costs

-

-

-

(499)

-

(499)

GDRs and shares

transferred under MLTIP

-

-

-

-

506

506

At 31 December 2019

210,034,648

199,305,492

230

26,998

(3,164)

24,064

GDRs buy-back

-

-

-

-

(661)

(661)

GDRs and shares

transferred under MLTIP

-

-

-

-

587

587

At 30 September 2020

(Unaudited)

210,034,648

199,305,492

230

26,998

(3,238)

23,990

At 30 September 2020 the total number of outstanding shares is 199,305,492 shares (31 December 2019: 199,305,492 shares) with a par value of USD 0.04 per share (31 December 2019: USD 0.04 per share).

At 30 September 2020 and 31 December 2019 treasury shares represent GDRs of the Group repurchased from the market for the purposes permitted by Cyprus law including contribution to MLTIP. Refer to Note 23.

At 30 September 2020 the total number of treasury shares is 3,013,379 (31 December 2019: 4,185,166).

During the nine months ended 30 September 2020 the Group repurchased 650,000 GDRs at market price for RR 661 million (nine months ended 30 September 2019: no GDRs were repurchased by the Group).

During the three months ended 31 March 2019 Altoville Holdings Limited converted 6,385,310 Class B shares into Class A (on a one-to-one basis), which was 3.49% of its share, and then sold them to the market.

In June 2019 the Company's shareholders approved a resolution to increase the authorised share capital to USD 8,401,385.92 by the creation of 18,263,882 new undesignated ordinary shares of nominal value USD 0.04 each. At 30 September 2020 the total number of authorised shares is 210,034,648 shares

(31 December 2019: 210,034,648 shares) with a par value of USD 0.04 per share (31 December 2019: USD 0.04 per share).

On 2 July 2019 the Group completed a SPO on the London Stock Exchange plc and issued 16,666,667 "Class A" shares of the Company in the form of GDRs at a price of USD 18.00 per GDR, raising aggregate gross proceeds of USD 300 million (RR 18,916 million). All issued ordinary shares are fully paid.

All the incurred SPO costs were primary direct expenses accounted within share premium.

36

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

14 Net Margin

Unaudited

Nine months Three months

Nine months Three months

ended

ended

ended

ended

30 September 30 September 30 September 30 September

In millions of RR

2020

2020

2019

2019

Interest income calculated using the

effective interest rate method

Loans and advances to customers, including:

67,784

21,298

62,189

22,197

Credit card loans

Cash loans

8,658

2,554

8,529

3,364

Secured loans

3,544

1,263

1,346

733

POS loans

3,247

1,091

2,363

925

Car loans

2,329

835

856

475

Loans to IE and SME

334

78

214

87

Debt securities and repurchase receivables at

FVOCI

7,589

2,988

4,835

1,556

Placements with other banks and non-bank

credit organizations with original maturities of

less than three months

502

98

312

128

Total interest income calculated using the

effective interest rate method

93,987

30,205

80,644

29,465

Other similar income

Debt securities and repurchase receivables at

FVTPL and loans and advances to customers

at FVTPL

13

2

118

-

Total interest income

94,000

30,207

80,762

29,465

Interest expense calculated using the

effective interest rate method

Customer accounts, including:

Individuals

- Current/demand accounts

7,134

2,345

6,365

2,419

- Term deposits

5,184

1,548

5,078

1,923

IE and SME

777

258

1,110

325

Other legal entities

18

4

33

8

RR denominated bonds

1,522

514

769

316

Subordinated debt

1,434

486

1,388

465

Due to banks

334

113

587

49

Euro-Commercial Paper

27

9

76

26

Total interest expense calculated using the

effective interest rate method

16,430

5,277

15,406

5,531

Other similar expense

Lease liabilities

110

36

107

39

Total interest expense

16,540

5,313

15,513

5,570

Expenses on deposit insurance

1,258

457

1,331

487

Net margin

76,202

24,437

63,918

23,408

37

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

15 Fee and Commission Income and Expense

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Fee and commission income

IE and SME current accounts commission

7,058

2,696

6,007

2,193

Acquiring commission

5,456

2,002

4,627

1,539

Brokerage operations

4,272

2,065

447

239

Fee for selling credit protection

3,519

1,120

4,364

1,252

SMS fee

2,881

994

2,347

843

Foreign currency exchange transactions fee

2,801

897

2,084

869

Interchange fee

2,349

1,233

2,555

1,016

Card to card commission

2,078

829

1,348

589

Income from MVNO services

1,271

495

551

258

Cash withdrawal fee

521

201

519

192

Marketing services fee

242

46

207

103

Placement fee

97

35

87

48

Other fees receivable

848

360

553

218

Total fee and commission income

33,393

12,973

25,696

9,359

IE and SME current accounts commission represents commission for services to individual entrepreneurs and small to medium businesses. Fee for selling credit protection represents fee which the Bank receives for selling voluntary credit insurance to borrowers of the Group. Acquiring commission represents commission for processing card payments from online and offline points of sale. Income from MVNO services represents income from providing mobile services such as full coverage across Russia and international roaming, offering a number of value-added options such as virtual numbers, music and video streaming services, etc.

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Fee and commission expense

Payment systems

9,894

3,926

7,442

2,768

Service fees

1,532

554

1,345

470

Banking and other fees

1,413

550

301

74

Payment channels

990

324

941

363

Costs of MVNO services

870

334

607

299

Total fee and commission expense

14,699

5,688

10,636

3,974

Payment systems fees represent fees for MasterCard, Visa and other payment systems' services. Service fees represent fees for statement printing, mailing service, sms services and others. Payment channels represent fees paid to third parties through whom borrowers make loan repayments. Costs of MVNO services represent expenses for the traffic, telecommunications service and roaming.

38

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

16 Customer Acquisition Expense

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Marketing and advertising

5,525

2,460

6,279

1,665

Staff costs

4,672

1,696

4,558

1,391

Taxes other than income tax

959

407

1,090

297

Partnership expenses

812

286

688

270

Credit bureaux

671

228

501

159

Cards issuing expenses

543

250

309

185

Telecommunication expenses

206

75

256

75

Other acquisition

203

71

207

7

Total customer acquisition expenses

13,591

5,473

13,888

4,049

Customer acquisition expenses represent expenses paid by the Group on services related to origination of customers which are not directly attributable to the recognised assets and are not incremental. The Group uses a variety of different channels for the acquisition of new customers.

Staff costs represent salary expenses and related costs of employees directly involved in customer acquisition. Included in staff costs are statutory social contributions to the state non-budgetary funds in the amount of RR 1,169 million for the nine months and RR 400 million for the three months ended 30 September 2020 (RR 1,185 million for the nine months and RR 362 million for the three months ended 30 September 2019).

17

Administrative and Other Operating Expenses

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Staff costs

17,519

6,226

14,355

5,270

Amortization of intangible assets

1,399

505

899

313

Depreciation of fixed assets

1,196

381

902

355

Taxes other than income tax

995

366

1,183

465

Information services

881

318

535

183

Other provisions

730

78

42

14

Depreciation of right-of-use assets

528

210

666

234

Professional services

440

219

586

139

Operating lease expense

382

129

311

103

Collection expenses

316

117

112

46

Office maintenance and office supplies

264

104

292

96

Communication services

192

69

215

67

Security expenses

145

48

129

53

Other administrative expenses

257

89

234

56

Total administrative and other operating

expenses

25,244

8,859

20,461

7,394

39

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

17 Administrative and Other Operating Expenses (Continued)

Included in staff costs are statutory social contributions to the non-budget funds and share-based remuneration:

Unaudited

Nine months

Three months

Nine months

Three months

ended

ended

ended

ended

30 September

30 September

30 September

30 September

In millions of RR

2020

2020

2019

2019

Statutory social contribution to the

non-budget funds

3,168

1,039

2,544

885

Share-based remuneration

449

254

380

98

18 Dividends

The movements in dividends during nine months ended 30 September 2020 and 2019 are as follows:

Unaudited

In millions of RR

2020

2019

Dividends payable at 1 January

582

760

Dividends declared

7,773

5,870

Dividends paid

(8,076)

(5,618)

Dividends paid under MLTIP after vesting date

(291)

(524)

Foreign exchange loss/(gains) on dividends payable

678

(7)

Dividends payable at 30 September

666

481

Dividends per share declared (in USD)

0.55

0.49

The movements in dividends during three months ended 30 September 2020 and 2019 are as follows:

Unaudited

In millions of RR

2020

2019

Dividends payable at 30 June

656

471

Dividends declared during the period

2,915

-

Dividends paid during the period

(2,944)

-

Dividends paid under MLTIP after vesting date

(116)

-

Foreign exchange loss on dividends payable

155

10

Dividends payable at 30 September

666

481

Dividends per share declared (in USD)

0.20

-

Dividends declared in the tables above represent dividends declared by the Board of Directors reduced by

  1. 39 million for the nine months and by RR 10 million for the three months ended 30 September 2020 for dividends on GDRs acquired by the Company from the market not for the immediate purposes of the

existing MLTIP (nine months ended 30 September 2019: RR 11 million, three months ended

30 September 2019: nil).

On 5 August 2020 the Board of Directors declared an interim dividend in line with the current dividend policy of USD 0.20 (RR 14.68) per share/per GDR with a total amount allocated for dividend payment of around USD 39.9 million (RR 2,925 million). Declared dividends were paid in USD on 24 August 2020.

40

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

18 Dividends (Continued)

On 11 May 2020 the Board of Directors declared an interim dividend in line with the current dividend policy of USD 0.14 (RR 10.34) per share/per GDR with a total amount allocated for dividend payment of around USD 28 million (RR 2,061 million). Declared dividends were paid in USD on 1 and 2 June 2020.

On 10 March 2020 the Board of Directors declared an interim dividend of USD 0.21 (RR 14.18) per share/per GDR with a total amount allocated for dividend payment of around USD 41.9 million (RR 2,826 million). Declared dividends were paid in USD on 30 March and 1 April 2020.

On 13 May 2019 the Board of Directors declared an interim dividend of USD 0.17 (RR 11.09) per share/per GDR amounting to USD 31.05 million (RR 2,026 million). Declared dividends were paid in USD on 28 and 30 May 2019.

On 11 March 2019 the Board of Directors declared an interim dividend of USD 0.32 (RR 21.11) per share/per GDR amounting to USD 58.4 million (RR 3,855 million). Declared dividends were paid in USD on 25 and 27 March 2019.

The above dividends were declared and paid in USD. Dividends payable at 30 September 2020 related to treasury shares acquired under MLTIP amounting to RR 666 million are included in other non-financial liabilities (31 December 2019: RR 582 million).

19 Segment Analysis

Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (CODM) and for which discrete financial information is available. The CODM is the person or group of persons who allocates resources and assesses the performance for the Group. The functions of CODM are performed by the Management of the Bank and the Management of the Insurance Company.

Description of products and services from which each reportable segment derives its revenue

The Group is organised on the basis of 4 main business segments:

Retail banking - representing customer current accounts, savings, deposits, investment savings products, custody, credit and debit cards, consumer loans, car loans, secured loans and brokerage services to individuals.

IE and SME accounts services - representing customer current accounts, savings, deposits services and providing loans to individual entrepreneurs and small to medium businesses.

Insurance operations - representing insurance services provided to individuals, such as personal accident insurance, personal property insurance, travel insurance and vehicle insurance.

MVNO services - providing full coverage across Russia and international roaming, offering a number of value-added options such as virtual numbers, music and video streaming services, etc.

The Management of the Group has refined the presentation of the Group's revenue structure in Segments analysis in order to present within revenues only those items of income which are not presented on a net basis. The comparative information was amended accordingly.

Factors that management used to identify the reportable segments

The Group's segments are strategic business units that focus on different services to the customers of the Group. They are managed separately because each business unit requires different marketing strategies and represents different types of businesses.

41

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Measurement of operating segment profit or loss, assets and liabilities

The CODM reviews financial information prepared based on International financial reporting standards adjusted to meet the requirements of internal reporting. The CODM evaluates performance of each segment based on profit before tax.

Information about reportable segment profit or loss, assets and liabilities

Segment reporting of the Group's assets and liabilities as at 30 September 2020 is set out below:

Unaudited

Retail

SME

Insurance

MVNO

Elimina-

Total

banking

accounts

operations

services

tions

In millions of RR

services

Cash and cash equivalents

49,681

23,366

2,634

53

(2,253)

73,481

Mandatory cash balances with the

CBRF

4,793

-

-

-

-

4,793

Due from other banks

-

-

1,882

-

-

1,882

Loans and advances to customers

345,903

3,110

-

-

(2,700)

346,313

Financial derivatives

7,343

-

-

-

-

7,343

Investments in securities

176,675

50,510

5,906

-

-

233,091

Repurchase receivables

5,048

-

-

-

-

5,048

Guarantee deposits with payment

systems

11,488

-

-

-

-

11,488

Current income tax assets

4,332

-

-

-

-

4,332

Deferred income tax assets

959

-

-

-

-

959

Tangible fixed assets and right-of-

use assets

10,639

-

-

81

-

10,720

Intangible assets

4,676

921

164

309

-

6,070

Other financial assets

15,096

579

1,628

280

(1,119)

16,464

Other non-financial assets

2,825

-

737

28

-

3,590

Total reportable segment assets

639,458

78,486

12,951

751

(6,072)

725,574

Due to banks

14,108

-

-

2,700

(2,700)

14,108

Customer accounts

444,623

71,042

-

-

(2,239)

513,426

Debt securities in issue

25,446

-

-

-

-

25,446

Financial derivatives

153

-

-

-

-

153

Subordinated debt

22,367

-

-

-

-

22,367

Insurance provisions

-

-

6,001

-

(32)

5,969

Other financial liabilities

17,802

-

1,126

500

(1,192)

18,236

Other non-financial liabilities

9,036

-

133

228

(15)

9,382

Total reportable segment

liabilities

533,535

71,042

7,260

3,428

(6,178)

609,087

42

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the nine months ended 30 September 2020 is set out below:

Unaudited

Retail

SME

Insurance

MVNO

Elimina-

Total

banking

accounts

operations

services

tions

In millions of RR

services

Nine months ended 30 September 2020

Revenues

Interest income calculated using the effective

interest rate method

91,496

2,335

351

1

(196)

93,987

Other similar income

11

2

-

-

-

13

Fee and commission income

-

7,058

-

-

-

7,058

- IE and SME current accounts commission

- Acquiring commission

5,129

391

-

-

(64)

5,456

- Brokerage operations

4,272

-

-

-

-

4,272

- Fee for selling credit protection

3,519

-

-

-

-

3,519

- SMS fee

2,881

-

-

-

-

2,881

- Foreign currency exchange transactions fee

2,494

307

-

-

-

2,801

- Interchange fee

1,523

826

-

-

-

2,349

- Card to card commission

2,078

-

-

-

-

2,078

- Income from MVNO services

-

-

-

1,271

-

1,271

- Cash withdrawal fee

521

-

-

-

-

521

- Marketing services fee

242

-

-

-

-

242

- Placement fee

97

-

-

-

-

97

- Other fees receivable

848

-

-

281

(281)

848

Timing of fee and commission income recognition:

- At point in time

20,723

8,567

-

1,552

(345)

30,497

- Over time

2,881

15

-

-

-

2,896

Total fee and commission income

23,604

8,582

-

1,552

(345)

33,393

Insurance premiums earned

178

-

13,981

-

(227)

13,932

Other operating income

2,326

39

156

-

(116)

2,405

Total revenues

117,615

10,958

14,488

1,553

(884)

143,730

Interest expense calculated using the effective

interest rate method

(15,697)

(777)

-

(152)

196

(16,430)

Other similar expense

(104)

-

-

(6)

-

(110)

Expenses on deposit insurance

(1,105)

(153)

-

-

-

(1,258)

Credit loss allowance for loans and advances to

customers and credit related commitments

(34,333)

(280)

-

-

-

(34,613)

Credit loss allowance charge for debt securities at

FVOCI

(350)

-

(10)

-

-

(360)

Fee and commission expense

(12,220)

(1,870)

-

(863)

254

(14,699)

Customer acquisition expense

(11,759)

(906)

(751)

(568)

393

(13,591)

Net gains from derivatives revaluation

6,678

-

-

-

-

6,678

Net losses from foreign exchange translation

(8,741)

-

-

(2)

-

(8,743)

Net gains from operations with foreign currencies

900

-

311

-

-

1,211

Net gains from disposals of debt securities at

FVOCI

6,787

-

-

-

-

6,787

Net gains/(losses) from debt instruments at

FVTPL

(20)

-

95

-

-

75

Insurance claims incurred

-

-

(2,935)

-

31

(2,904)

Administrative and other operating expenses

(21,075)

(2,513)

(1,084)

(686)

114

(25,244)

Net gains from repurchase of subordinated debt

168

-

-

-

-

168

Segment result

26,744

4,459

10,114

(724)

104

40,697

43

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's income and expenses for the three months ended 30 September 2020 is set out below:

Unaudited

Retail

SME

Insurance

MVNO

Elimina-

Total

banking

accounts

operations

services

tions

In millions of RR

services

Three months ended 30 September 2020

Revenues

Interest income calculated using the effective

interest rate method

29,492

664

114

1

(66)

30,205

Other similar income

-

2

-

-

-

2

Fee and commission income

-

2,696

-

-

-

2,696

- IE and SME current accounts commission

- Acquiring commission

1,828

198

-

-

(24)

2,002

- Brokerage operations

2,065

-

-

-

-

2,065

- Fee for selling credit protection

1,120

-

-

-

-

1,120

- SMS fee

994

-

-

-

-

994

- Foreign currency exchange transactions fee

783

114

-

-

-

897

- Interchange fee

892

341

-

-

-

1,233

- Card to card commission

829

-

-

-

-

829

- Income from MVNO services

-

-

-

495

-

495

- Cash withdrawal fee

201

-

-

-

-

201

- Marketing services fee

46

-

-

-

-

46

- Placement fee

35

-

-

-

-

35

- Other fees receivable

327

-

-

113

(80)

360

Timing of fee and commission

income recognition:

- At point in time

8,126

3,342

-

608

(104)

11,972

- Over time

994

7

-

-

-

1,001

Total fee and commission income

9,120

3,349

-

608

(104)

12,973

Insurance premiums earned

73

-

4,555

-

(82)

4,546

Other operating income

1,103

-

59

-

(75)

1,087

Total revenues

39,788

4,015

4,728

609

(327)

48,813

Interest expense calculated using the effective

interest rate method

(5,033)

(258)

-

(51)

65

(5,277)

Other similar expense

(36)

-

-

-

-

(36)

Expenses on deposit insurance

(396)

(61)

-

-

-

(457)

Credit loss allowance for loans and advances to

customers and credit related commitments

(6,604)

18

-

-

-

(6,586)

Credit loss allowance charge for debt securities at

FVOCI

(99)

-

-

-

-

(99)

Fee and commission expense

(4,902)

(607)

-

(313)

134

(5,688)

Customer acquisition expense

(4,819)

(340)

(271)

(198)

155

(5,473)

Net gains from derivatives revaluation

3,720

-

-

-

-

3,720

Net losses from foreign exchange translation

(4,242)

-

-

-

-

(4,242)

Net gains from operations with foreign currencies

48

-

243

-

-

291

Net gains from disposals of debt securities at

FVOCI

538

-

-

-

-

538

Net (losses)/gains from debt instruments at FVTPL

(9)

-

74

-

-

65

Insurance claims incurred

-

-

(782)

-

(13)

(795)

Administrative and other operating expenses

(7,600)

(670)

(399)

(229)

39

(8,859)

Net gains from repurchase of subordinated debt

18

-

-

-

-

18

Segment result

10,372

2,097

3,593

(182)

53

15,933

44

TCS Group Holding PLC

Notes to the Consolidated Condensed Interim Financial Information - 30 September 2020

19 Segment Analysis (Continued)

Segment reporting of the Group's assets and liabilities as at 31 December 2019 is set out below:

Retail

SME

Insurance

MVNO

Elimina-

Total

banking

accounts

operations

services

tions

In millions of RR

services

Cash and cash equivalents

31,098

25,524

3,851

43

(2,720)

57,796

Mandatory cash balances with the

CBRF

3,448

-

-

-

-

3,448

Due from other banks

250

-

1,834

-

-

2,084

Loans and advances to customers

330,905

900

-

-

(2,630)

329,175

Financial derivatives

390

-

-

-

-

390

Investments in securities

90,566

41,950

2,662

-

-

135,178

Guarantee deposits with payment

systems

8,877

-

-

-

-

8,877

Current income tax assets

807

-

8

-

-