20,000 people chose to be part of the Kyiv Independent community — thank you.

Skip to content
Edit post

Russia's Sberbank reports $4.32 billion profit, dividends to boost Kremlin war chest

by Chris York April 26, 2024 3:54 PM 2 min read
The logo of Russia's state-owned Sberbank is seen atop one of the towers of Moscow's International Business Centre (Moskva City) in Moscow on April 28, 2023. (Alexander Nemenov/AFP via Getty Images)
This audio is created with AI assistance

Russia's state-owned Sberbank announced a first-quarter net profit of $4.32 billion, an 11.3% increase over the same period last year, Reuters reported on April 26.

Despite being under Western sanctions, Russia's banking industry is once again thriving. Sberbank reported a record annual profit of $16.3 billion in 2023, a more than five-fold increase in 2022.

"We are observing strong growth for the start of the year in retail clients' funds, which forms a solid base for the development of the business in the future," CEO German Gref said in a statement reported by Reuters.

The bank announced on April 23 that it would pay out a dividend of $8.04 billion. Being majority-owned by the Russian state, this money can be used to fund the full-scale invasion of Ukraine.

In the immediate aftermath of Russia's full-scale invasion of Ukraine in 2022, Russia's banks – increasingly isolated from the global economy and laden with heavy Western sanctions – saw profits fall by 90% compared to 2021.

But the pain was short-lived, and just a year later, Russia’s Central Bank announced the country’s banks had achieved record profits last year, raking in some $36.8 billion.

In an effort to overcome Western sanctions, the Kremlin implemented a number of economic measures, one of which was subsidized mortgages, which were taken up by Russians in huge numbers.

In 2023, mortgage lending rose by nearly 35%, according to data from Russia’s Central Bank, with 83.4% of those mortgages being subsidized.

The huge increase in mortgage repayments has reinvigorated Russia's banks while the government has had to pay banks more and more money to make up the shortfall between their "preferential rate" and the actual rate.

But even Russian officials admit that this kind of expenditure is not sustainable in the long run and is already pushing inflation levels up.

At the end of last year, Russia’s inflation stood at 7.4 percent, compared to 3.7 percent in Germany and 3.4 percent in the United States.

Russian banks post record profits. Is war helping them?
2022 heralded a new era for Russia’s banks. Increasingly isolated from the global economy and laden with heavy Western sanctions, the sector saw profits fall by 90 percent compared to 2021. For Russia’s technocrats, the future seemed dim. Then came 2023. Russia’s Central Bank announced last week

Independent journalism needs a community —
not a paywall.

We’re working hard to show the world the truth of Russia’s brutal war — and we’re keeping it free for everyone, because reliable information should be available to all.

More than 20,000 people chose to stand behind us. We’re deeply grateful and overwhelmed with your support. Thank you for making it possible.

Let´s see how far we can go?

News Feed

8:42 PM

Egyptian POW didn't need money, but went to fight for Russia.

Egyptian-born Russian fighter, callsign "Cobra," signed a contract with the Russian army in 2024, abandoning his young wife, university studies and comfortable lifestyle. Now in Ukrainian prison, he's rethinking his choices. Subscribe to our channel for more independent reporting from Ukraine.
MORE NEWS

Editors' Picks

Enter your email to subscribe
Please, enter correct email address
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
* indicates required
Subscribe
* indicates required
Subscribe
* indicates required
Subscribe
* indicates required

Subscribe

* indicates required
Subscribe
* indicates required
Subscribe
* indicates required
Explaining Ukraine with Kate Tsurkan
* indicates required
Successfuly subscribed
Thank you for signing up for this newsletter. We’ve sent you a confirmation email.