The largest Western banks that remain in the market in Russia paid the Kremlin more than 800 million euros in taxes last year. This is a fourfold increase compared to the tax payments they made to the Russian state before the start of the war in Ukraine – in February 2022, despite promises to minimize their exposure to Russia, the "Financial Times" reported, quoted by bTA.
The seven largest European banks by assets in Russia — "Raifeisen Bank International" (Raiffeisen Bank International), "Unicredit" (UniCredit), I&G (ING), "Comertzbank" (Commerzbank), "Deutsche Bank" (Deutsche Bank), "Inteza Sanpaolo" (Intesa Sanpaolo) and OTP (OTP), have reported a total profit of more than 3 billion euros in Russia in 2023.
The sum is more than three times the corresponding result of Western banks before the war in Ukraine, in 2021, and was partly generated by funds that banks cannot withdraw from Russia.
The jump in their profitability resulted in tax payments to the Russian budget of around 800 million euros, up from just 200 million euros in 2021, according to an analysis by the British financial daily. The American lenders "Citigroup" (Citigroup) and "JP Morgan Chase" (JPMorgan Chase) also made gains in Russia.
The taxes paid by European banks, equivalent to about 0.4 percent of all expected non-energy budget revenues for Russia in 2024, are an example of how foreign companies remaining in the country are helping the Kremlin maintain financial stability despite the western sanctions.
Foreign creditors have 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 Western banks' own attractiveness for customers in the country.
More than half of the €800 million in tax payments to European banks comes from Austria's Raiffeisen Bank International, which has the largest presence in Russia of any foreign lender.
The profits of "Raifeisen Bank International" from operations in Russia have more than tripled to 1.8 billion euros in 2023 compared to 2021. This represents half of the Austrian group's total profit, compared with a share of about a third before the war.
In addition to regular tax contributions last year, the Austrian lender paid 47 million euros as a result of an extraordinary levy the Kremlin imposed on some companies.
At the same time, however, "Deutsche Bank", "Commerzbank" and the Hungarian OTP have significantly reduced their presence in Russia, their representatives have indicated.
Despite closing its corporate and retail businesses in Russia, Citigroup, the fourth-largest US lender, earned $149 million in profits and paid $53 million in taxes in Russia in 2023 , became the fourth largest taxpayer among Western banks in Russia, according to calculations by the Kyiv School of Economics based on data from the Russian Central Bank.
Another American giant, "JP Morgan Chase", earned $35 million and paid $6.8 million in taxes in 2023.