Page 104 - RusRPTApr21

Growth
The target of 20mn customers could be reached much faster than by the end 2023, which was the company’s initial ambition. The YTD trajectory for new client acquisition should be steep before likely normalizing later in the year.
The average number of products per customer grew from 1.3 at YE19 to 1.4 at YE20 despite the expansion of the customer base.
The minimum guided rate for net loan book growth (30% YoY for FY21) could turn out to be visibly below the actual rate, as this guidance is conservative.
The extra capital accumulated following the suspension of dividends could be spent on M&As, with the likely targets being projects in non- credit segments, which are complimentary to Tinkoff's product offerings. International M&As have not been ruled out.
TCS Group is unlikely to consider directly expanding into e-commerce, instead seeing itself as best positioned to offer related services to retailers, mostly on the payments front.
Asset quality
There are no worrying signs from the current delinquency rates, while the outstanding macro adjustment at YE20 was RUB 5.6bn. Consequently, TCS Group’s FY21 cost-of-risk guidance of 7-8% is on the conservative side.
NIM
The gross yield is likely to continue losing 50-100bps per quarter, with periodic fluctuations outside this range. The gross yield is still being driven by the shift from secured loans to more affluent sub-segments in the credit card segment.
In the base case, the funding cost is likely to improve in FY21 thanks to the growing share of current accounts (including brokerage accounts) in TCS Group's funding structure.
This improvement could be slowed down or reversed if Sberbank raises deposit rates, which should be partly mitigated by the growing share of current accounts (including brokerage accounts) in TCS Group's funding structure.
Brokerage
While the number of clients and revenue continue to expand, the growth in the brokerage segment’s net profit should lag behind as TCS Group spends more on client acquisition.
This is a deliberate strategy to attract more affluent customers.
Insurance
Around a third of TCS Group’s insurance revenue represents credit protection.
There have been no further updates from CBR on its plan to include
104 RUSSIA Country Report April 2021 www.intellinews.com