Deutsche Bank Russian profits leapt in 2022, even as assets dropped

Deutsche Bank Russian profits leapt in 2022, even as assets dropped

FILE PHOTO: Deutsche Bank logo is seen in this illustration taken March 12, 2023. REUTERS/Dado Ruvic/Illustration


(Reuters) – Deutsche Bank (ETR:DBKGn)’s Russian subsidiary’s profits jumped by almost six times in 2022 to 5.4 billion roubles ($66.42 million), Russian audit documents showed, the latest example of a foreign lender booking strong earnings in the Russian market.

Foreign banks have stepped in to take business from Russian lenders who fell under sweeping Western sanctions imposed following Moscow’s decision to send tens of thousands of troops into Ukraine in February last year.

Deutsche Bank said it would wind down its business in Russia in March 2022, joining other foreign lenders in leaving the country. It had already reduced its Russian footprint in recent years and is continuing to de-risk its Russian IT operations, including relocating staff.

Profit for the period leapt by more than 480% to 5.4 billion roubles. However, total assets dropped 36.3% to 81.6 billion roubles.

Net interest income jumped more than 10 times to just over 7 billion roubles. Russia lifted its key rate to 20% in an emergency move after Moscow launched what it calls a “special military operation”, before gradually lowering it to 7.5%. 

Deutsche Bank declined to comment.

As of Dec. 31, 2022, Deutsche Bank’s loan exposure to Russia amounted to 806 million euros ($884.02 million) on a gross basis and approximately 0.2% of the total loan book, the group said in its annual report. That compared to 1,397 million euros a year earlier.

“The majority of loan exposure relates to large Russian companies with material operations and cash-flow outside of Russia,” the bank said in that report. “Such existing loans may be provided onshore by DB Moscow, or offshore by other group entities outside of Russia.”

Italian bank Intesa Sanpaolo (OTC:ISNPY)’s Russian subsidiary also saw a profit jump in 2022, while Austria’s Raiffeisen Bank International, earned more than half of its profit last year from Russia.

The audit documents, dated March 31, were first reported on Thursday.

($1 = 81.3060 roubles)

($1 = 0.9117 euros)


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