TBank: net profit falls despite 31.2% NII growth — provisions eat the operating leverage

On August 11, 2026, TBank released its Q2 2026 results. Net interest income grew 31.2% YoY to RUB 162.2 billion, but net profit fell 15.4% to RUB 39.5 billion. This review explains why NII growth is not converting into profit and what it means for shareholders.

Key takeaways

— Net interest income grew 31.2% to RUB 162.2 billion, but net profit fell 15.4%

— Net margin compressed: net profit margin dropped from 37.8% to 24.4%

— Loan loss provisions surged 35% — the main drag on profit

— Fee income grows slower than interest income: +13.6% for the half-year

— Capex halved to RUB 14.0 billion in the quarter

— Dividend yield of 10.4% on our estimate — above fair, but payment is uncertain

— Shares fell 9.4% after the report — market saw deteriorating credit quality

Key figures, RUB bn

Net interest income grew 31.2% to RUB 162.2 billion, but net profit fell 15.4%

In Q2 2026, TBank's net interest income reached RUB 162.2 billion, up 31.2% YoY. This continues a steady trend: in Q1 2026, the metric grew 29.2% YoY to RUB 149.1 billion. The main driver is lower funding costs: interest expenses for the half-year fell 8% as the CBR cut its key rate from 16.0% to 14.25%.

However, quarterly net profit was only RUB 39.5 billion, down 15.4% YoY. The gap between NII growth and profit is explained by a sharp rise in loan loss provisions: for the half-year, they increased 35% YoY to RUB 87.0 billion. This eats the operating leverage that NII growth provides.

Net margin compressed: net profit margin dropped from 37.8% to 24.4%

Net profit margin in Q2 2026 was 24.4% versus 37.8% a year earlier. This means TBank now earns 13.4 kopecks less net profit per ruble of revenue. The main reasons are faster growth in provisions and operating expenses.

For the half-year, technology development costs rose 12%, marketing 29%, and administrative expenses 42%. These investments support business growth but pressure the margin. As a result, half-year net profit grew only 4.5% (to RUB 74.5 billion), while net revenue rose 24.9%.

Loan loss provisions surged 35% — the main drag on profit

For H1 2026, expected credit loss provisions reached RUB 87.0 billion versus RUB 79.7 billion a year earlier — a 35% YoY increase. In Q2, provisions were RUB 41.5 billion, above the 2025 average.

The rise in provisions reflects deteriorating credit quality: the bank is actively expanding lending (customer loans grew from RUB 3,170.7 billion at end-2025 to RUB 3,459.7 billion at June 30, 2026), and the share of problem loans is likely increasing. This is confirmed by the sensitivity of provisions to PD and LGD changes: a 0.5 pp PD change alters provisions by RUB 9.5 billion.

Fee income grows slower than interest income: +13.6% for the half-year

Service revenue for H1 2026 was RUB 187.5 billion, up 13.6% YoY. This is notably slower than NII growth (+29.9% for the half-year). The fee business, which should diversify income, is not yet compensating for the provision pressure.

In Q2, fee income was RUB 99.1 billion versus RUB 85.8 billion a year earlier. Growth slowed compared to Q1, when it was 13.6% YoY. This may indicate market saturation or increased competition in payment services.

Capex halved to RUB 14.0 billion in the quarter

Capex in Q2 2026 was RUB 14.0 billion versus RUB 25.955 billion a year earlier — a nearly twofold decline. For the half-year, capex also decreased: RUB 32.2 billion in Q1 and RUB 14.0 billion in Q2, totaling RUB 46.2 billion versus RUB 57.0 billion in H1 2025.

Lower capex is a positive signal for free cash flow, but it partly reflects the completion of major investment projects. The cash flow statement shows that purchases of property and equipment for the half-year were RUB 21.0 billion, and intangibles RUB 21.8 billion — less than a year earlier (RUB 40.0 and RUB 18.0 billion, respectively).

Dividend yield of 10.4% on our estimate — above fair, but payment is uncertain

Over the last 12 months, TBank paid dividends of RUB 16.2 per share, a yield of 6.5% at the current price. Our model estimates the next payment at RUB 25.92 per share, implying a yield of 10.4% — above the fair yield of 10.5% for this name.

The implied payout ratio is 0.74 of profit. However, with deteriorating credit quality and rising provisions, management may prefer to retain capital. In the H1 2026 report, declared dividends were RUB 11.5 billion, less than the RUB 8.2 billion in the same period last year, but this is only part of the annual payment.

Shares fell 9.4% after the report — market saw deteriorating credit quality

The share price before the release was RUB 278.88, it rose 1.6% on the release day, but by August 17, 2026, it had fallen 9.4% from the post-release price. This suggests investors reacted negatively to the combination of rising provisions and falling net profit.

Meanwhile, the P/E LTM multiple is 3.62 — a very low value, reflecting high risks related to sanctions and economic uncertainty. ROE at 20.9% remains high, but if provisions continue to rise, return on equity will decline.

Valuation on the latest reported figures

Bottom line

TBank continues to grow net interest income (+31.2% in Q2), helped by lower funding costs. However, a 35% rise in provisions and faster growth in operating expenses led to a 15.4% drop in net profit. Net margin fell from 37.8% to 24.4%, and this is the key signal for shareholders: operating leverage is working in reverse. Shares fell 9.4% after the report, reflecting market disappointment. The question for holders is whether the bank can stabilize credit quality and return profit to growth, or whether provisions will continue to weigh on results.