The bank was registered as Khimmashbank in January 1994. In 2005, the bank joined the national deposit insurance system, and in 2006 the bank was bought by famous entrepreneur Oleg Tinkoff* and was renamed Tinkoff Credit Systems Bank (CJSC), and shifted its business focus to households.
In 2007, the lending institutions shares were acquired by international investment bank Goldman Sachs, and in 2008 Swedish investment fund Vostok Nafta joined. In the middle of 2012 international direct investment fund Baring Vostok Capital Partners invested USD 50 mln in TCS Bank as part of an additional share issue. In October 2012, investment fund Horizon Capital, which specializes in mid-cap companies with high potential (headquartered in Kyiv), bought an equity stake in the financial institution. Tinkoff Banks market value soared by nearly 7x within less than five years.
In October 2013, the bank went public on the London Stock Exchange, netting roughly USD 1.09 bln. In addition to a big stake, investors were offered the banks additional shares. Oleg Tinkoffs equity stake in Tinkoff Banks increased capital (60.6% prior to the IPO) dropped to 50.9%.
In August 2014, an entry was made in the United State Register of Legal Entities about the establishment of limited liability company Phoenix. Phoenix is the banks subsidiary, with the bank holding a 51% interest. This company was planned to be providing bad debt recovery services to the bank.
In June 2015, the Saint Petersburg Directorate of the Federal Anti-Trust Service filed an anti-trust case against Tinkoff Bank, and the case was later remitted to the Services central office. To remind, the banks actions caused public disorder in the summer of 2015 because the bank unilaterally changed terms of SmartVklad deposits. Individuals complained about the banks decision to unify replenishment terms for deposit accounts that were opened between December 24, 2014 and April 30, 2015, and deposit accounts whose rate was raised due to new market conditions. So, to any amounts to be put on these deposit accounts the bank decided to apply the single interest rate regardless of deposit duration (13% for ruble and 4% for foreign currency accounts). By comparison, in the past the interest rate on additional contributions to SmartVklad deposit accounts was accrued on a fixed basis, ranging from 16% to 18% depending on when deposit account agreements are signed. On October 26, 2015 the Federal Anti-Trust Service recognized Tinkoff Banks actions as unfair competition because the bank drew retail funds into term replenishable deposit accounts with subsequent deterioration of their consumption properties. As Tinkoff Bank failed to rectify the violation voluntarily, the FAS commission issued the relevant injunction to the bank. The lending institution was demanded to cancel the decision reducing the interest rate accruable since July 2015 on amounts of additional contributions to replenishable term deposit accounts which were opened from December 24, 2014 through April 30, 2015, inclusive, and under deposit account agreements, under which the interest rate was increased from December 17, 2014 through April 30, 2015. FAS also obliged the bank to pay customers a shortfall in their income within 90 days since the date on which the injunction was received.
The Federal Anti-Trust Service fined Tinkoff Bank and its official by Rub 300,000 and Rub 12,000, respectively, for unfair competition in the deposit market (the administrative offence provided for in Article 14.33.1 of the Russian Code of Administrative Offences). After this Tinkoff Bank challenged the Services ruling and injunction in court, demanding to declare the anti-trust bodys ruling and injunction invalid. However, on June 1, 2015 the court issued a ruling in favor of the anti-trust authority. As a result, Tinkoff Bank cancelled its decision reducing the interest rate on deposit accounts which was taken unilaterally. The interest rate was cut as of July 1, 2015. This concerned any amounts added to high-rate deposit accounts which were opened since late December 2014 through April 2015 when banks raised sharply deposit rates after the Bank of Russia lifted its key rate to 17%.
Oleg Tinkoff currently controls 47.31% of the banks shares. Also, 50.06% constitute free float on the London Stock Exchange (as GDRs). Investment fund Vostok Emerging Finance (the fund is a listed company) holds a 1.64% interest, and Baring Vostoks equity stake is 0.99%.
The bank is headquartered in Moscow. The bank does not have any divisions because all banking operations are instantly carried out via remote telecom channels. To deliver products the bank runs a representative network of over 1,800 people. In 2016, the banks average headcount, based on IFRS data, totaled 9,900 (6,300 a year earlier). Cardholders have access to a big number of ATMs operated by partner banks all across Russia, as well as payment terminals and mobile stores. The bank serves over 4 mln customers all around Russia. Retail deposits are accepted via postal and bank transfers, and funds can be deposited through a network of partner banks (money transfer systems Contact, Golden Crown, etc.), several mobile stores and a network of terminals, etc.).
The banks services are mainly focused on households and include deposit accounts, debit and credit cards, mortgage loans, cash loans, investment, payments, insurance products, online banking, and credit cards. As of October 1, 2017 the bank was the second biggest player in the Russian credit card market, commanding 11.6% (9.7% a year ago). The bank provides businesses with cash settlement services, payroll projects, merchant acquiring solutions, a store-based system of consumer lending, etc.
In 2017, the banks net assets soared 50% to Rub 288 bln as of January 1, 2018. This jump was primarily funded by retail funds (+29.4% in 2017), balances held on corporate settlement accounts (over 300% y-o-y) and unlimited subordinated Eurobond which the bank placed in June 2017 (USD 300 mn). All asset items showed solid positive performance. In absolute terms, the biggest increase was recorded in the retail credit portfolio (up Rub 38.8 bln, or 33%), and in the bond portfolio (up Rub 44.4 bln) that more than doubled.
As of year-start 2018, 53.3% of the banks liabilities fell to retail deposits (63% a year ago). Funds of businesses and institutions accounted for 19.3%, including unlimited subordinated loans in the form of Eurobond. Equity accounted for 14.8%, while issued bonds and inter-bank loans drawn by the bank equaled 3.4%. Retail funds mainly include balances held on check/card accounts and 6M+ deposit accounts. Monthly turnover of corporate settlement accounts gradually increased in 2017, rocketing by nearly 10x y-o-y (to Rub 150 bln in December 2017).
As of early 2018, the banks capital adequacy ratio (№ 1.0) stood at a comfortable level, being twice as much as the 8% statutory threshold. The core capital adequacy ratio (№ 1.1) was lower because the banks subordinated loans were not included in calculations, but it was over twice as much as the minimum 4.5% threshold.
As of early 2018, 57.7% of the banks net assets fell to the credit portfolio, with around 93% falling to retail loans. The banks positions in the corporate lending market are relatively modest, but during 2017 the corporate credit portfolio expanded by 2.5x, while the retail credit portfolio jumped by a third. Most of the retail credit portfolio fell to credit cards. According to the financial results as of September 30, 2017 corporate loans included three credit lines opened by the parent company — TCS Group Holding PLC — and T-Finance LLC. The aggregate portfolios overdue debt was 8.4% (9.3% as of January 2017). Loan loss provisions are above-average (15% vs. 16.6% a year earlier). The credit portfolios collateralization rate is zero due to specific features of the banks business. It should be noted that the bank regularly assigns rights of claim under troubled loans, including to its debt collection subsidiary, Phoenix, thereby maintaining overdue debt at an acceptable level.
The securities portfolio accounts for 27.3% of net assets, and fully comprises bonds that, in turn, include Eurobond, Russian corporate bonds and government securities (OFZs). As of the balance sheet date, the bank did not have any bonds collateralized under repurchase transactions. Even though the bank carries out repurchase transactions, their turnover is modest, and so is monthly liquidity drawn in the inter-bank lending market.
The banks currency market activities scaled down substantially in 2017 compared to the previous year. In the second half of 2017, turnover in this area of business totaled Rub 25—50 bln. In the inter-bank lending market the bank heavily offers liquidity, drawing funds in small amounts. Funds are deposited at commercial banks and the Bank of Russia, with aggregate monthly turnover ranging from Rub 40 bln to Rub 250 bln in 2017.
In 2017, the bank earned Rub 17.3 bln in net profit, or doubling the year-earlier indicator.
The Board of Directors: Oleg Tinkoff (chairman), Oliver Hughes, Vadim Stasovsky, Sergei Pirogov, and Svetlana Ustilovskaya.
The Management Board: Oliver Hughes (chairman), Ilya Pisemsky, Evgeny Ivashkevich, Stanislav Bliznyuk, Natalia Izyumova, Anatoly Makeshin, and Valeria Pavlyukova.
* Oleg Tinkoff (born 1967) is a Russian entrepreneur, the founder and former owner of electronics retailer Elektroshok, ready-food manufacturer Darya, brewery and restaurant chain Tinkoff. In 2000, Tinkoff completed a marketing course at the University of California, Berkeley. Since 2006 he has been rolling out banking business under the Tinkoff Credit Systems brand.
In 2017, Oleg Tinkoff moved up from 169th to 79th in Forbes Russian billionaire rating, with net worth assessed at USD 1.2 bn (up nearly 2.5x y-o-y). Hide