According to a report by the Financial Times, Western banks in Russia paid four times more taxes last year than before the war in 2021. The largest European banks operating in Russia paid over 800 million euros in taxes in 2023, compared to just 200 million euros in 2021. This increase corresponds to 0.4 percent of Russia’s budget for the year, excluding taxes on oil and gas trade.
The seven European banks included in the report are Austrian Raiffeisen Bank International, Italian Unicredit and Intesa Sanpaolo, Dutch ING, German Commerzbank and Deutsche Bank, and Hungarian OTP. These are some of the largest Western banks operating in Russia. While some US banks are also active in the country, Europeans benefit from an improvement in their financial performance due to these high interest rates and economic sanctions on Russian banks. These sanctions have excluded Russian banks from international payment systems, making Western banks more attractive to Russian customers.
Raiffeisen Bank International accounted for over half of the taxes paid by European banks in Russia last year and saw its profit more than triple to 1.8 billion euros compared to the previous year. Despite this success, Raiffeisen has announced plans to reduce its business operations in Russia due to concerns about political instability and sanctions violations. Other European banks may follow suit as they weigh the benefits of their operations against potential risks associated with doing business in Russia during these uncertain times.
