The number of very rich people in the country has multiplied by one and a half times over the past year. And its total financial capital (excluding real estate) increased by five trillion rubles, to 13.1 trillion. This conclusion was reached by experts from the research company Frank RG. To do this, they studied the market for premium banking services, surveying more than 1,800 wealthy clients.
THANKS TO THE SANCTIONS FOR THIS
According to experts, by the end of 2023, the number of people with financial capital of 60 million rubles or more increased by 40% and amounted to 52.5 thousand people. The number of people in the segment within the new limits of 100 million rubles (which is approximately equivalent to a million dollars) amounted to almost 22 thousand people, an increase of 50%. And the richest stratum, clients with assets of 500 million rubles or more, were about 4 thousand. The indicator increased by 60% (see chart).
As experts explain, this growth is natural. First, some people began to return capital from abroad. Secondly, the outflow of capital from the country has also decreased. And the free money has to be invested somewhere. They then flowed into the banks and the stock market.
– The most important driver of the growth of financial capital was the entry of “new money”, which is mainly due to a reduction in the outflow of capital from the country. According to the Bank of Russia, the volume of cross-border transfers in 2023 decreased by 35% compared to the previous year, says Lyubov Prokopova, project director of Private and Premium Banking at Frank RG.
According to company estimates, the “new money” amounted to about 3 trillion rubles. These are like those who returned to the country. So are those that were won within Russia.
– I believe that many factors have influenced the growth of the number of rich people and their capital. And the withdrawal of funds from abroad, because it has become dangerous to keep them there. And higher corporate profits, including through dividends. And finally, asset recalculation. Last year the dollar rose strongly. Russian stock prices rose sharply. Hence the growth of capital among very rich people, who keep most of their money in securities, says Georgiy Ostapkovich, professor at the Higher School of Economics.
For reference: last year, the Moscow Stock Exchange index rose by 43%, and taking into account dividends – more than 50%. Currencies showed a slightly smaller, but still decent increase. At the beginning of 2023, the dollar was worth 70 rubles, and at the end of the year – 90 rubles. The Chinese yuan grew by almost a quarter over the year: from 10.3 to 12.6 rubles.
MORE IS LOOKING ABROAD
By the way, despite the sanctions, many wealthy clients continue to keep part of their funds in foreign currency. Its participation in portfolios represents 29%. In comparison, in 2021 it was almost double: 52%.
Furthermore, the rich still prefer to keep a larger portion of their capital abroad. About 60% of the savings are found there. But the situation is also changing. Before the sanctions, around 70% of savings and investments were held abroad (see chart).
The share of foreign assets does not fall for several reasons. Firstly, due to the difficulties of cross-border transfers. Secondly, if you bring money to Russia, in most cases you will have to pay taxes. Therefore, some customers are in wait-and-see mode. They are not increasing their assets abroad, but they are also not in a hurry to return all the money to the country. Withdraw funds whenever possible from the most dangerous jurisdictions. So, if Europe was previously considered the most reliable place to store funds, now priorities have changed. The proportion of those with savings in the UK has halved, and in Switzerland it has tripled. Most of these people did not transfer capital elsewhere, but rather returned it to their homeland.
By the way, for comparison, three trillion rubles is the same amount that the country’s entire banking sector received as net profit last year. And that’s double the projected federal budget deficit for this year. In general the quantity is very decent. The only thing left to do is wait for other escaped capital to return to the country. Apparently, we definitely cannot do without a tax amnesty. It is now being discussed by officials and experts as part of the discussion about new tax changes.
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