Russia’s Tinkoff Group eyes bank license in Philippines

MANILA, Philippines — Moscow-based Tinkoff Group is seeking a commercial banking license to establish its presence in the Philippines as part of the group’s international expansion strategy.

With the Philippines as an exciting market with a lot of untapped potential, Tinkoff Bank Russia board director George Chesakov has been tasked to lead the operations in the country.

Chesakov, the international expansion lead of the Tinkoff Group, is joined by Raffy Montemayor, who has previously headed 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,” the group said in a statement.

The Tinkoff Group, whose shares are traded in London and Moscow, has reaffirmed its commitment to the planned expansion into the Philippines after reporting record quarterly net profit for the first nine months and third quarter of this year.

Tinkoff Group co-CEO Oliver Hughes said, in an interview with CNBC, the group chose the Philippines because of the opportunities for promoting financial inclusion.

Although the market is different, Hughes said 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 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 added.

In Russia, Tinkoff operates as a tech company with banking and brokerage licenses. It was founded in 2006 amid 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.

“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 asset management business, as well as from other complementary businesses,” Tinkoff Group co-CEO Pavel Fedorov earlier said.

However, he said the group believes that operations should not be in any way in the gray area of regulatory arbitrage.

“It should be on a fully licensed basis of a commercial bank complemented as needed by the asset management licenses,’’ Fedorov said.

Tinkoff, with a market capitalization of 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.

Tinkoff is 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.