In major Russian fintech deal TCS banking group eyes Tochka

In major Russian fintech deal TCS banking group eyes Tochka
Fintech is still hot in Russia. Russia’s only purely online bank Tinkoff is considering buying Tockha fintech service for SMEs in a $317mn deal. / bne IntelliNews
By bne IntelliNews December 15, 2022

Banking group TCS, operating Russia’s only purely online bank Tinkoff, is considering buying Tockha fintech service for SMEs and entrepreneurs for RUB20bn ($317mn), Kommersant daily reported citing unnamed banking sources.

The potential deal shows that the fintech market in Russia maintains enough momentum despite the fallout from the full-scale military invasion of Ukraine. Moreover, Tochka seems to have gained value ahead of the sale.

Tochka provides one-stop-shop online financial services to over 0.5mn SMEs and entrepreneurs. It was founded in 2018 as a joint venture with e-payment system Qiwi (50%), Otkritie Bank (40%), with another 10% minus 1 share retained by Tochka's management led by Boris Diakonov and Eduard Panteleev.

In September 2021 troubled Qiwi lost its online betting revenue stream and sold its 40% stake in Tochka to Otkritie for RUB5bn, with the whole business valued at RUB11bn. In March 2022 Otkrytie sold 90% of the shares to state-controlled Trust Bank.

Trust (Trast) Bank, a “bad” assets bank bailed out by the Central Bank of Russia (CBR) in the 2019 banking sector clean-up, is now reportedly putting Tochka up for sale for double the valuation it bought the fintech runner-up for.

Kommersant’s sources claim that Tinkoff Bank, a major consumer crediting bank that has avoided Western sanctions, is considering buying Tochka at RUB20bn. Tochka representatives confirmed to Kommersant that "the key shareholder... is considering the possibility of selling to large financial-industrial groups from the top 100”.

Analysts and lawyers surveyed by Kommersant believe that TCS will have to apply to the minority shareholders with a buyout offer. Tochka is seen as one of the best Russian fintech projects, showing an example of how an asset can actually grow in value amid sanctions.

The synergies between Tochka and Tinkoff Bank look logical to analysts, with comparable SME banking market shares and range of digital fintech services.

To remind, the former investor darling TCS was recently picked up by the sanctioned oligarch Vladimir Potanin, who is rebuilding his banking empire. The bank remains one of the major Russian consumer lenders that is still unsanctioned.

After TCS founder Oleg Tinkov published a sharp foul-mouthed critique of the "insane war" in Ukraine on his social media, Tinkoff Bank immediately distanced itself from its founder and Tinkov was forced to sell the banking group to Potanin.

Most recently, Tinkov said he will contest and try to recall the Tinkoff brand after publicly renouncing Russian citizenship. But TCS shrugged off the threats by its founder and posted strong results for 9M22.