- Raiffeisen Financial institution spent $220 million extra in employees prices for the Russian market within the first half of 2023.
- The bump was as a consequence of greater salaries and social safety prices, one-off funds, and elevated headcount.
- The Austrian financial institution is the most important Western financial institution nonetheless working in Russia. It is engaged on a spin-off.
Firms are exiting Russia in hordes — however one main Western financial institution simply boosted employees pay at its Russian subsidiary.
Workers prices on the Russian subsidiary of Austria’s Raiffeisen Financial institution elevated by 199 million euros, or $219 million, for the primary half of 2023, in accordance with the financial institution’s half-year report launched Tuesday.
Because the Vienna-based lender has practically 10,000 employees in Russia, this could translate to about 22,000 euros, or simply over $24,000, in payouts per worker in Russia.
Raiffeisen stated the rise in employees prices was the “results of greater salaries and social safety prices, provisions for one-off funds, and a rise in headcount.” The financial institution’s Russian subsidiary added 331 employees within the first half of the 12 months, per the report.
And although the rise in headcount is minuscule, the financial institution’s employees value doubled throughout the reporting interval, the Monetary Instances reported Tuesday. The financial institution didn’t break down the employees prices.
Raiffeisen Financial institution — the most important Western financial institution nonetheless working in Russia, per Reuters — remains to be worthwhile within the nation. Income after tax at Raiffeisen’s Russian enterprise rose 9% on-year to 685 million euros within the first six months of the 12 months. In distinction, earnings throughout the group dropped 24% over the interval.
Nonetheless, the Australian lender is underneath growing stress to exit the Russian market over the Ukraine battle. It stated it’s planning to take action.
“We proceed to work at full pace on two choices for our enterprise in Russia: a sale and a spin-off,” stated chief government Johann Strobl on Tuesday, as he introduced the financial institution’s outcomes for the primary half of the 12 months, per FT. “Whereas we’re engaged on these complicated choices, we’re consequently persevering with to scale back the enterprise in Russia.”
Strobl stated the financial institution is aiming to spin off its Russian enterprise by the tip of 2023.
Even so, exiting Russia is difficult because the Kremlin is making it more and more punitive to depart the nation.
“The market situations for companies in Russia are extremely complicated. The native and worldwide legal guidelines and laws governing the sale of companies in Russia are topic to fixed change,” the financial institution wrote in its second-quarter report.
The New York Instances reported Monday that Russia’s wartime economic system is flourishing as a consequence of state-backed efforts to spice up progress — though the growth is probably not sustainable amid sweeping sanctions.
Raiffeisen Financial institution didn’t instantly reply to a request for remark from Insider despatched exterior common enterprise hours.
