Western Banks Pay Four Times More Taxes in Russia in 2023, Despite Economic Uncertainty and Sanctions

In 2023, Western banks operating in Russia paid four times more taxes than they did before the war in 2021, according to a report by the British newspaper Financial Times. Seven European banks, including Raiffeisen Bank International, Unicredit, Intesa Sanpaolo, ING, Commerzbank, Deutsche Bank and OTP paid a total of 800 million euros in taxes in Russia last year. This amount represents 0.4 percent of Russia’s budget for the year, excluding taxes on oil and gas trade.

The increase in taxes paid by these banks was attributed to their improved financial results. The combined profits of these banks exceeded three billion euros in 2023, three times higher than in 2021. Western banks operating in Russia benefit from the country’s high interest rates and economic sanctions on Russian banks which have heightened the appeal of Western banks to Russian customers. Despite its success in Russia, Raiffeisen has expressed intentions to scale back its operations in the country.

According to FT’s summary of European banks operating in Russia are Raiffeisen Bank International, Unicredit, Intesa Sanpaolo, ING, Commerzbank, Deutsche Bank and OTP. These are the largest European banks operating in Russia but there are also US banks still active in the country. However there are reports that due to increased pressure from governments and regulators many foreign companies are starting to reconsider their operations or exit altogether due to political instability and economic uncertainty caused by events like war and sanctions imposed by western countries against Russian government officials or oligarchs close to them .