Bank accounts of Russians abroad

Main item: Deposits of individuals in Russia

2024:87% of the cash flow of Russians abroad settles on deposits instead of 29% in 2021

Despite full-scale sanctions, restrictions on cross-border operations and blocking risks, by the spring of 2024, Russians are actively investing and/or placing savings in instruments of foreign issuers/in an external jurisdiction, but there are important nuances.

At this time, up to 87% of cash flow goes to deposits (about 0.8 trillion rubles per year) placed in foreign banks, while in 2021, on average, 29% was sent to deposits. About 2.5 times more leaks in this direction than in 2021.

2023

The increase in the number of Russians with bank accounts abroad by 70% to 539.1 thousand people

As of December 31, 2023, the number of Russians with bank accounts abroad amounted to 539.1 thousand. This is approximately 70% more than in the previous year. This is stated in the data of the Federal Tax Service (FTS), published on April 1, 2024.

According to RBC, referring to the statistics of the Federal Tax Service, in 2023 there were 1,825 million foreign accounts of Russian tax residents. Their number increased by 164% on an annualized basis. Thus, one tax resident of Russia with foreign accounts accounted for an average of 3.4 financial accounts abroad.

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B1 partner Maria Frolova believes that significant growth is associated with the current geopolitical situation. After leaving the Russian Federation, Visa and Mastercard, Russians were actively looking for alternatives in friendly countries for settlements on trips abroad. According to the Bank of Russia, in 2022, Russians withdrew a record 1.47 trillion rubles abroad. As of the beginning of 2024, Russians held the equivalent of 6.7 trillion rubles abroad.

At the same time, as noted by the Central Bank, the indicated amount does not reflect the real amount of money in the foreign accounts of Russians: the regulator sees funds leaving abroad, but does not track where they are then sent - these may be purchases for parallel imports or daily expenses of those who went abroad.

The systematically tax service of Russia does not disclose information about the number of foreign accounts: the last time such data was announced at the beginning of 2021 - then the Federal Tax Service was aware of 700 thousand accounts of Russians abroad in the amount of more than 13 trillion rubles and 400 thousand of their owners. In October 2023, the deputy head of the Shepelev service reported an increase in their number by 30% by 2020, without giving absolute values.^[1]

Foreign currency deposits of Russians in foreign banks during the conflict in Ukraine increased by $45 billion

Foreign currency deposits in foreign banks by November 2023 increased by $45 billion since the beginning of the conflict in Ukraine, and in Russian banks decreased by $47 billion, the volume of cash increased by $10 billion, but does not change since April 2022, Spydell Finance reported based on data from the Central Bank of Russia.

Decrease in the outflow of currency of individuals abroad by half to 81 billion rubles per month

After the start of Russia's military special operation in Ukraine, the actual observed outflow of foreign currency of individuals from Russia averages 160 billion rubles per month (6.2 times higher than normal), but in April-July 2023 the outflow decreased to 81 billion rubles per month.

Continued growth in foreign deposits

Russian households and enterprises seek to ensure their safety by transferring money outside the country. Retail deposits overseas increased by $43.5 billion between early 2022 and May 2023, according to Bloomberg Economics.

The failed mercenary insurgency PMC Wagner was a new impetus for weakening. ruble Although it quickly ended under a deal brokered by the president, Belarus Alexander Lukashenko the episode posed the biggest threat to Putin's nearly quarter-century-old rule and raised questions about stability in, as Russia the military sting operation against is now Ukraine in its 17th month.

Prigozhin's mutiny likely forced local investors to update their local risk assessments.

2022

The amount of funds of Russians in foreign banks reached $94.3 billion. Part could have already been spent

The assets of Russians in banks abroad in 2022 tripled. As of January 1, 2023, the funds of Russians in foreign banks reached $94.3 billion, follows from the data of the Central Bank. For 2022, the volume of balances increased by 208.2% - this is a record increase for the entire time of disclosure of statistics.

The comments of the Central Bank of the Russian Federation indicate that not the entire increase in assets in foreign banks can be considered as an increase in savings. An unidentified part could be distributed into purchases of goods and services after foreign payment systems left Russia.

Also, some part in the growth of foreign assets can be obtained by obtaining income from business abroad or through the sale of foreign securities. The Central Bank has no understanding of the scale and structure of these processes.

Growth of assets in banks abroad 2.7 times to $81.7 billion or almost 5 trillion rubles

By December 1, 2022, the assets of Russians in foreign currency amounted to 8.4 trillion rubles, and only 3.5 trillion of them were in Russia.

banks According to the results of November, Russian deposits in foreign countries reached a record 81.7 billion, dollars jumping 2.7 times since the beginning of the year. In ruble terms, the amount is almost 5 trillion. rubles

The share of foreign currency deposits in Russia in November fell below 15 percent.

Foreign currency deposits of the population in foreign banks ($66 billion) exceeded deposits in Russian banks ($56 billion) against the background of partial mobilization during the conflict in Ukraine

The Bank of Russia published data on the reduction of foreign currency deposits of the population: in September 2022, amid panic associated with partial mobilization during the conflict in Ukraine, by $7 billion, over the year they decreased by $31.9 billion, or 34% YoY (were $91 billion in January). At the same time, foreign currency deposits of the population in foreign banks increased, in September they added $6.7 billion, and over the year their increase amounted to $34.1 billion, i.e. 118% YoY.

In the third quarter of 2022, Russians transferred a record 1.47 trillion rubles to deposits abroad. Compared to the third quarter of 2021, the figure increased almost 26 times, then it amounted to 57 billion rubles.

As a result, foreign currency deposits of the population in foreign banks ($63 billion) exceeded deposits in Russian banks ($61 billion) by September.

The volume of foreign currency deposits of Russians in Russia in October fell to $56 billion, which was the lowest indicator since the end of 2008.

By early December 2022, Russians had accumulated almost 4.2 trillion rubles ($66 billion) in foreign accounts. In January-November of this year alone, savings grew by 1.9 trillion at once - this is almost 5 times more than in the entire previous year.

These are the deposits that were identified, but about $200-300 billion is concentrated through trusts, funds and shell/fictitious companies.

The total monetary assets of Russian households in foreign currency even increased from 122 to 126 billion dollars. To this can be added an increase in cash foreign currency by 10 billion from 85 to 95 billion dollars, i.e. deposits and cash in foreign currency increased from 207 to 221 billion dollars from January to October 2022.

The share of turnover and investments in yuan is growing, but according to preliminary calculations, dollars and euros occupy over 90% in the structure of savings in monetary instruments in foreign currency.

Total foreign exchange assets balance about $260 billion (cash, deposits, shares, shares and bonds in foreign currency) - this is close to an historical high of 270 billion. The assessment is at the current market rate, where the ruble has strengthened greatly.

With the weakening of the ruble, the share of foreign currency deposits will grow. In November 2022, foreign currency assets in the structure of total liquid assets of Russian households amount to about 23%, which is not so far from the average share of 27.7% in the period from 2020 to 2021 and 28.7% in January 2022.

The main contribution to the decline in the share of foreign currency assets was made by the re-strengthened ruble exchange rate and the sale of shares in foreign companies.

From the point of view of positioning and perception of the new reality, there are no special changes. The propensity to put assets into currency continues unabated, despite unprecedented pressure on capital movements and substantial infrastructure risks, when everything can be lost, not counting a significant increase in costs.

This suggests that mainly large Russian capital is not too optimistic about the future of Russia, the Spydell Finance channel noted.

Placement of foreign currency deposits abroad for $4.7 billion in July

In June 2022, Russians placed in accounts and deposits in banks abroad currency for 266.1 billion rubles. (with an average exchange rate of 57.2 rubles per dollar), writes RBC.

In dollar terms, this amount amounted to $4.7 billion, which can be considered a record since at least 2018, for the entire time of publication of such statistics by the Central Bank. The withdrawal of funds accelerated after the easing of the Central Bank's restrictions on transfers and the introduction by banks of commissions for storing currency in accounts within the country.

2021: FTS counted 13 trillion rubles in foreign accounts of Russians

By January 14, 2021, Russians have more than 700 thousand financial accounts, which hold more than 13 trillion rubles. This was stated by the deputy head of the Federal Tax Service Dmitry Volvach.

Today we already see that such a base is stable in our country - somewhere Russians have in the whole world, in the perimeter that is covered by automatic exchange, somewhere more than 700 thousand financial accounts. This is 400 thousand tax residents - legal entities and individuals, - he said, speaking at the Gaidar Forum (quoted by TASS Information Agency of Russia).

As the deputy head of the Federal Tax Service explained, the Russian tax authorities knew about part of the accounts earlier, and information about other accounts appeared thanks to the system of automatic exchange of financial information between countries.

FTS counted 13 trillion rubles in foreign accounts of citizens of the Russian Federation

Since 2021, the Federal Tax Service has expanded the list of foreign assets that Russians must report on and forced them to disclose data on them. So, now you need to provide information not only about cash flows, but also information about other financial assets. We are talking about securities, derivatives, shares in the authorized capital of a legal entity, shares in foreign structures without the formation of a legal entity and "other financial assets."

Russia has been participating in the international exchange of financial information with tax authorities in other countries since 2018. In accordance with OECD standards, it is required to disclose information not only about bank accounts, but also about all other financial assets of taxpayers. The standard requires the disclosure of beneficiaries of structures such as trusts and funds that are popular with Russians, said Dmitry Volvach.

If we compare with the base that we now see, I can speak highly of the level of compliance of our respected Russian taxpayers. That is, the share of inconsistencies we identify is very small compared to the volume of assets and the number of accounts that we see and that come to us from our foreign partners, "he added.[2]

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