Tinkoff reaffirms PH expansion plan after record high net profit for Q3

Publicly listed Tinkoff Group, whose shares are trading in London and Moscow, has reaffirmed its commitment to the planned expansion into the Philippines after reporting record quarterly net profit for 3Q and 9M 2021.

Tinkoff, one of the world’s largest and most profitable digital banks, serving more than 18.5 million customers across Russia via its innovative digital ecosystem of financial and lifestyle services told CNBC that “the time has now come’’ to expand to Asia.

Oliver Hughes, Co-CEO of Tinkoff Group, said in an interview with CNBC that Tinkoff chose the Philippines because of the opportunities for promoting financial inclusion. Although the market is different, Hughes said that Russia was in a similar situation when Tinkoff started there 15 years ago. “We think we will be able to deploy our service, our product, our customer experience and UX in the Philippines and other Asian markets and then beyond in order to go deep into the customer relationship and do a Tinkoff2 in another market,’’ Hughes said.

In Russia, Tinkoff operates as a tech company with banking and brokerage licenses. It was founded in 2006 amidst the backdrop of a large unbanked population, high friction and high cost in lending and natural geographical challenge of servicing customers spread across the largest country in the world in land area. Tinkoff was branchless from the start and helped revolutionize digital financial services through its customer-centric approach to launching new products, use of AI for greater efficiency and personalization, and a broad range of credit and non-credit business lines, which provide banking, payments, brokerage, acquiring, and other services to individuals and to businesses. Earlier this year, Tinkoff was named The Best Digital Bank of Central and Eastern Europe by Euromoney Magazine and ‘Bank of the Year in Russia’ by the Banker, a leading international finance publication which is part of the Financial Times Group.

“If you want to sum it up, the DNA of our business model [in Russia] is a large debit card core that is driven to profitability by the well-executed credit business and cross-sold to from asset management business, as well as from other complementary businesses,’’ Pavel Fedorov, Co-CEO of Tinkoff Group, said on a conference call with investors and analysts in November. “However, we also believe that our operations should not be in any way in the grey area of regulatory arbitrage and if we pursue an opportunity, it should be on a fully licensed basis of a commercial bank complemented as needed by the asset management licenses.’’

Tinkoff is pursuing obtaining a commercial banking license in the Philippines, in line with its ‘’license-first’’ international expansion strategy and sees the Philippines as an exciting market with a lot of untapped potential. Its nominated directors include George Chesakov, the Chairman of the Board of Directors of Tinkoff Bank Russia and International Expansion Lead at Tinkoff Group, and Raffy Montemayor, who has previously looked after the businesses of Agoda, OLX and Carousell in the Philippines.

Tinkoff is committed to building a sustainable business in the Philippines that will open access to innovative banking services to Filipinos across the country while driving financial inclusion and financial literacy. 

Tinkoff, whose market capitalization is approximately $20 billion, has been named a systemically important financial institution by the Central Bank of Russia. It is the only fintech company and the only digital bank in the world to be granted such status by the regulator.


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