The biggest Western bank still operating in Russia gave its employees an extra $220 million over the last 6 months. That’s an average of $24,000 per employee.

• Raiffeisen Bank spent $220 million more in staff costs for the Russian market in the first half of 2023.
• The bump was due to higher salaries and social security costs, one-off payments, and increased headcount.
• The Austrian bank is the largest Western bank still operating in Russia. It’s working on a spin-off.

Companies are exiting Russia in hordes — but one major Western bank just boosted staff pay at its Russian subsidiary.

Staff costs at the Russian subsidiary of Austria’s Raiffeisen Bank increased by 199 million euros, or $219 million, for the first half of 2023, according to the bank’s half-year report released Tuesday.

As the Vienna-based lender has nearly 10,000 staff in Russia, this would translate to about 22,000 euros, or just over $24,000, in payouts per employee in Russia.

Raiffeisen said the increase in staff costs was the “result of higher salaries and social security costs, provisions for one-off payments, and an increase in headcount.” The bank’s Russian subsidiary added 331 staff in the first half of the year, per the report.

And though the increase in headcount is minuscule, the bank’s staff cost doubled during the reporting period, the Financial Times reported Tuesday. The bank did not break down the staff costs.

Raiffeisen Bank — the largest Western bank still operating in Russia, per Reuters — is still profitable in the country. Profits after tax at Raiffeisen’s Russian business rose 9% on-year to 685 million euros in the first six months of the year. In contrast, profits across the group dropped 24% over the period.

However, the Australian lender is under increasing pressure to exit the Russian market over the Ukraine war. It said it is planning to do so.

“We continue to work at full speed on two options for our business in Russia: a sale and a spin-off,” said chief executive Johann Strobl on Tuesday, as he presented the bank’s results for the first half of the year, per FT. “While we are working on these complex options, we are consequently continuing to reduce the business in Russia.”

Strobl said the bank is aiming to spin off its Russian business by the end of 2023.

Even so, exiting Russia is complicated as the Kremlin is making it increasingly punitive to leave the country. 

“The market conditions for businesses in Russia are highly complex. The local and international laws and regulations governing the sale of businesses in Russia are subject to constant change,” the bank wrote in its second-quarter report.

The New York Times reported Monday that Russia’s wartime economy is thriving due to state-backed efforts to boost growth — although the boom may not be sustainable amid sweeping sanctions.

Raiffeisen Bank did not immediately respond to a request for comment from Insider sent outside regular business hours.