In 2023, Western banks operating in Russia paid four times more taxes than they did before Russia’s attack on Ukraine, according to a report by the Financial Times (FT). The largest Western banks still active in Russia paid 800 million euros in taxes last year, compared to 200 million euros in 2021. This increase in taxes accounts for 0.4 percent of Russia’s budget for the year, excluding taxes on oil and gas trade.
The seven European banks included in FT’s summary are Austrian Raiffeisen Bank International, Italian Unicredit and Intesa Sanpaolo, Dutch ING, German Commerzbank and Deutsche Bank, and Hungarian OTP. These are the largest European banks operating in Russia, with some US banks also active in the country. The improvement in these banks’ financial performance led to an increase in earnings. The combined profit of these seven banks was over three billion euros last year, triple the result from 2021.
The sanctions imposed on Russian banks have made Western banks more attractive to Russian customers due to their high interest rates. These sanctions have excluded Russian banks from international payment systems, allowing Western banks to capture a larger share of the market. Raiffeisen Bank International accounted for over half of the taxes paid by European banks in Russia last year and saw its profit triple to 1.8 billion euros compared to the 2021 result. Despite this success, Raiffeisen Bank International has stated its plans to reduce its business operations in Russia.
