The largest Western banks that remained in Russia paid the Kremlin more than €800 million in taxes in 2023. This is four times more than in the pre-war period.
The Financial Times writes about it.
The seven largest European banks by assets in Russia — Raiffeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo and OTP — reported combined profits of more than €3 billion in 2023.
These gains were three times higher than in 2021 and were partly generated by funds that banks cannot withdraw from the country.
The jump in profitability has seen European banks pay around €800m in tax, up from €200m in 2021, FT analysis shows. This came on top of gains for US lenders such as Citigroup and JPMorgan.
Taxes paid by European banks are equivalent to approximately 0.4% of all expected non-energy revenues of the Russian budget for 2024.
Foreign lenders benefited not only from higher interest rates, but also from international sanctions against Russian banks. Such measures deprived their competitors of access to international payment systems and increased the attractiveness of Western banks for customers in the country.
More than half of the tax payments of European banks fall on the Austrian Raiffeisen Bank International, which has the largest presence in Russia among foreign creditors. RBIʼs profits in Russia have more than tripled to €1.8 billion between 2021 and 2023, accounting for half of the Austrian groupʼs total profits.
- In mid-January 2023, The Financial Times wrote that more than 40 Western banks cannot leave the Russian market on acceptable terms due to the decree of the President of the Russian Federation Vladimir Putin. It stipulates that any agreements on the sale or purchase of banks require the approval of the authorities.
- At the same time, the Austrian banking group Raiffeisen Bank International announced that it will deal with the possible sale or separation of its Russian business. There, they undertook to reduce activity in Russia.
- In May, EUobserver wrote that the European Union plans to help European companies leave the Russian market so that they do not finance a full-scale Russian war against Ukraine with their taxes.
- On April 19, 2024, Reuters wrote that the European Central Bank wants to force UniCredit to exit the Russian market.