FT: Western banks paid 4 times higher taxes to the Russian budget than before the invasion of Ukraine

The largest Western banks that continue to operate in Russia paid 800 million euros in taxes to the country’s budget in 2023, four times more than before Moscow’s all-out invasion of Ukraine, according to the Financial Times (FT). , picked up by the Kyiv Independent.

In the immediate aftermath of Russia’s full-scale invasion of Ukraine in 2022, Russian banks – increasingly isolated from the global economy and burdened by tough Western sanctions – saw their profits drop by 90% compared to 2021.

Despite this, the Russian banking industry is once again thriving. Russian state-owned Sberbank reported a record annual profit of $16.3 billion in 2023, a more than five-fold increase from 2022.

Seven European banks with the largest assets in Russia – Raiffeisen Bank International, UniCredit, ING, Commerzbank, Deutsche Bank, Intesa Sanpaolo and OTP – reported combined profits of more than 3 billion euros in 2023. This is three times higher than in 2021.

The jump in profitability has seen European banks pay around €800m in taxes, up from €200m in 2021, according to FT analysis. This added to the profits of US lenders such as Citigroup and JPMorgan.

The taxes paid by the banks are equivalent to about 0.4 percent of all Russian non-energy budget revenues expected for 2024, according to the FT.

“(This is) an example of how foreign companies remaining in the country help the Kremlin maintain financial stability despite Western sanctions,” the financial publication wrote.

The increase in European banks’ profits is partly explained by the funds they cannot withdraw from Russia due to restrictions imposed by Moscow after the large-scale invasion of Ukraine, according to the FT.

Publisher: AC

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