FT: Western banks paid 800 million euros in taxes in Russia in 2023

The largest Western banks still operating in Russia paid more than 800 million euros in taxes to the Kremlin in 2023, despite Russia’s ongoing war aggression against Ukraine.

This is stated in the analysis in the Financial Times.

The seven largest European banks by assets in Russia—Raifeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo, and OTP—reported total profits of more than €3 billion in 2023.

Funds that banks are unable to withdraw from the country contributed to these profits, which were three times higher than in 2021.

The jump in profitability resulted in European banks paying about €800 million in taxes, compared to €200 million in 2021, the publication’s analysis shows. 

These taxes are equivalent to about 0.4% of all expected non-energy revenues in the Russian budget for 2024. They are an example of how foreign companies remaining in the country help the Kremlin maintain financial stability despite Western sanctions.

Foreign lenders have benefited not only from higher interest rates but also from international sanctions against Russian banks. Such measures have deprived competitors of access to international payment systems and increased the attractiveness of Western banks for clients in the country.

The Austrian Raiffeisen Bank International, the largest foreign creditor in Russia, makes more than half of the tax payments made by European banks.

Recently, a group of MEPs addressed an open letter to the Austrian authorities and expressed concern over the plans of the Austrian Raiffeisen Bank International to recruit new staff in Russia.

According to media reports, the United States is pressuring the Austrian bank to abandon its plans to buy a Russian oligarch’s industrial stake worth 1.5 billion euros.