We had the pleasure of speaking with Marc Rubinstein, author of Net Interest, a financial sector newsletter, about his essay, Tinkoff, Russia’s Capital One.
Marc writes:
Today, Russia’s Tinkoff is lauded as one of the best digital banks in the world. But it wasn’t always that way. In October 2013, the company had just gone public and at my fund we had become shareholders. Tinkoff was a leader in the fledgling Russian credit card market; founded several years earlier by Oleg Tinkov, a serial entrepreneur. Its growth prospects were fantastic and its valuation reasonable. Yet within a month its stock price was down by a third and over the next two years it would go on to lose 90% of its value.
We didn’t stick around for the full duration of that slide. Fortunately for today’s shareholders, the management team did. They weathered the downturn and brought the company out stronger. No longer just a credit card play, Tinkoff is active across a range of financial services and beyond. It has delivered revenue growth of 40% a year and generates returns on capital in excess of 30%. Unlike many other digital banks around the world, it is profitable. And unlike them, it started life as a bank, complete with license and balance sheet.
In fact, it started life as a Russian replica of America’s Capital One.
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About This Audio Series:
MOI Global is delighted to engage in illuminating conversations on the financial sector with Marc Rubinstein, whose Net Interest newsletter we have found to be truly exceptional. Our goal is to bring you Marc’s insights into financial services businesses and trends on a regular basis, with Marc’s weekly essays serving as inspiration for our discussions.
About Marc Rubinstein:
Marc is a fellow MOI Global member, managing partner of Fordington Advisors, and author of Net Interest. He is a former analyst and hedge fund manager, most recently at Lansdowne Partners, with more than 25 years of experience in the financial sector. Marc is based in London.
About Net Interest:
Net Interest, authored by Marc Rubinstein, is a newsletter of insight and analysis from the world of finance. Enjoyed by the most senior executives and smartest investors in the industry, it casts light on this important sector in an easy-to-read style. Each post explores a theme trending in the sector. Between fintech, economics and investment cycles—there’s always something to talk about!
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