TCS Group Holding PLC buys back 680,000 GDRs for its long-term management incentive and retention plan

TCS Group buys back 680,000 GDRs for its long-term management incentive and retention plan

Moscow, Russia - 17 April 2018. TCS Group Holding PLC (TCS LI) (the "Group"), Russia's leading provider of online retail financial services via its Tinkoff.ru financial supermarket, today provides an update on its long-term management incentive and retention plan (MLTIP).

Following the expansion of the MLTIP, the Group continues to follow its long-standing practice of pre-funding the plan through buybacks. As part of this initiative:

• on 13 April 2018 the Group repurchased 380,000 GDRs at an average net price per GDR of USD18.55 (within the range USD18 to USD18.84) and on 16 April another 100,000 GDRs at an average net price of USD19.25; and
• on 16 April the Group agreed to repurchase a further 200,000 GDRs at an average net price of USD18.79.

Additional purchases may be undertaken opportunistically as and when the Group sees attractive opportunities based on the market price of its GDRs.

The Group believes that the current market environment represented and may well continue to be a good opportunity to repurchase GDRs. The fundamentals of the Group's business remain strong. As announced on 10 April 2018, the Group remains well on track to meet its Net Income target of at least RUB 24bn in 2018 as well as the other metrics in the Group's 'Guidance for 2018' in the Company's announcement of 13 March 2018. Moreover, measures recently announced by the US Treasury Department do not in Management's view materially impact the Group, its core operations, ultimate beneficial owner, customers or planned capital markets activities.

The Board of Directors on 5 March 2018 approved an increase in the number of MLTIP participants from 67 to 83 with effect from 31 March 2018. The MLTIP is awarded over four years, materially subject to the fulfilment of annual KPIs, with each such annual award vesting linearly over the three subsequent years. All participants are employees of the Group, working full time in the Russian Federation. The aim of the expansion, as the Group continues to grow the scale and scope of its operations, is to ensure that the interests of its broader management team are closely aligned with the interests of shareholders to grow the Group's value. The target total size of the MLTIP pool is nearly 5.6% of the Group's current share capital.

About the Group

TCS Group is an innovative provider of online retail financial services operating in Russia through a high-tech branchless platform. TCS Group includes Tinkoff Bank, mobile virtual operator network Tinkoff Mobile, Tinkoff Insurance, and Tinkoff Software DC, a network of IT development hubs across Russia.

The Group was founded in 2006 by the Russian entrepreneur Oleg Tinkov and has been listed on the London Stock Exchange since October 2013.

With no retail branches, the Group serves its customers remotely via online channels and its call centre, and operates a network of over 2,500 representatives to ensure smooth delivery of its products. The network covers all of Russia and allows next day delivery to most customers.

The Group's key business is Tinkoff Bank, Russia's first and only direct bank offering both own brand and partner retail financial services via its Tinkoff.ru platform. The product range includes daily banking (credit and debit cards, payments, money transfers), savings, investments, loyalty programmes, travel services, SME services, mortgage platform, and insurance. With its special focus on mobile business, the bank offers mobile applications both for its customer base (Mobile Bank) and beyond it (Traffic Fines, MoneyTalk, Card 2 Card instant money transfers).

As at 1 February 2018, the bank was the second largest player in the Russian credit card market, with a market share of 11.7%. The FY 2017 IFRS net income of TCS Group Holding PLC amounted to RUB 19.0 bn, ROE stood at 53%.

Banki.ru, Russia's largest financial news portal, named Tinkoff Bank the Bank of the Year 2016. In October 2016 Tinkoff Bank was named the largest independent global direct bank by Frost & Sullivan. In 2015 and 2016, the Global Finance magazine named Tinkoff Bank as the Best Consumer Digital Bank in Russia. In 2016, the bank also won Global Finance's Best Integrated Consumer Bank Site award and was named the Best Digital Bank in the CEE by Euromoney. The bank's mobile application was recognised as the best in Russia by Markswebb Rank & Report for three consecutive years in 2014, 2015 and 2016, and by Deloitte for four consecutive years from 2013 to 2016.

Forward-looking statements

Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of the Group and Tinkoff Bank. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might", the negative of such terms or other similar expressions. The Group and Tinkoff Bank wish to caution you that these statements are only predictions and that actual events or results may differ materially. The Group and Tinkoff Bank do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Group and Tinkoff Bank, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries the Group operates in, as well as many other risks specifically related to the Group, Tinkoff Bank and their respective operations.