FT: Western banks in Russia paid €800 million in taxes to the Kremlin last year

Author:
Olha Bereziuk
Date:

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.