Russian corporates fleeing the dollar

Russia’s biggest bank has recorded a 17-fold decrease in foreign-currency savings on the balance sheet of large businesses, according to Anatoly Popov, deputy chairman of Sber’s executive board, as cited by the Russian business daily RBK. The lender is widely seen as a proxy for the Russian economy. 

The volume of foreign-currency funds held by the bank’s largest corporate clients decreased by 94% in the first six months of the current year, Popov said. 

“We have made significant efforts to reduce the volume of foreign-exchange liabilities of unfriendly countries, as restructuring businesses in such a fashion allows for efficiency to be maintained,” Popov said 

“Thus, from January to July 2022, the volume of funds of the largest clients kept on foreign currency deposits with Sberbank decreased by 94%. At the moment, the share of funds in foreign currency in the structure of deposits of the largest clients is 4%, while at the beginning of the year this figure was 40%,” he added. 

The bank was hit by US financial restrictions in February, shortly after the launch of Russia’s military operation in Ukraine. In April, Washington expanded full blocking sanctions on the state lender.  

According to Sber’s financial reports filed with Russia’s central bank, as of January 1, there was $24.5 billion in foreign currency deposits of both private and public non-financial organizations. Given the reported 94% decline as of July 1, the figure could be down to around $1.5 billion.  

In March, the Bank of Russia said it would temporarily reduce the scope of financial reporting required by the country’s banks on their websites and the regulator’s website in an attempt to reduce the risk of sanctions.

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