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Russia’s TCS Group says full-year profit will lag 2019…

By Andrey Ostroukh

MOSCOW, Aug 6 – Russian bank TCS Group Holding on Thursday reported a 25% rise in second-quarter net profit, but said it expects full-year earnings to lag 2019 levels as it reintroduced guidance scrapped last quarter due to the COVID-19 pandemic.

The Russian banking sector has taken a hit from the coronavirus and related lockdowns, which are expected to have pushed the economy into recession and pressured prices for oil, its key export, while weakening the rouble.

TCS, the parent company of Tinkoff Bank, withdrew its guidance for full-year net profit last quarter amid uncertainty related to the outbreak.

Reintroducing its targets on Thursday, it said it now expects net profit to come in at 30 billion-35 billion roubles ($409.6 million-$478 million).

Previously it had expected the measure to increase to 42 billion roubles, another record, from 36.1 billion in 2019.

TCS said its second-quarter net profit rose by 24.7% to 10.2 billion roubles, beating the market consensus reported by Interfax news agency of 8.2 billion roubles.

Return on equity (ROE), an indicator of how much profit the company generated from money invested by its shareholders, fell to 40% from 64.7% a year earlier.

The group’s non-performing loans ratio also rose to 10.8% compared with 9.1% as of end-2019 “due to the consequences of the COVID-19 outbreak and the denominator effect as loan book growth slowed in the second quarter,” TCS said.

Its loan loss provision coverage was 1.7 times higher than its non-performing loans.

TCS said it expected its net loan portfolio to return to steady growth in the second half of the year.

“We see 2020 guidance a bit conservative on net income,” BCS brokerage said.

The bank said its board had approved a third interim gross dividend payment of $0.20 per share, allocating $39.9 million to second-quarter dividends. ($1 = 73.2300 roubles) (Reporting by Andrey Ostroukh and Maria Kiselyova; Editing by Jason Neely and Jan Harvey)

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