The Luxembourg subsidiary of Russia's Gazprombank turned geopolitical turmoil into a record €61.4 million profit year, raising questions about who benefited and how.
Four executives at Gazprombank’s Luxembourg arm reportedly made profitable transactions during the market mayhem that followed Russia’s invasion of Ukraine.
The Luxembourg subsidiary, GPB International S.A., posted a record net profit of €61.4 million in 2022. That figure was more than three times its previous best year.
The forex windfall that built a record year
Foreign exchange trading was the engine behind GPB International’s 2022 blowout. Forex transactions generated over €55 million, accounting for roughly 90% of operating income that year.
The subsidiary has operated out of Luxembourg since late 2013, functioning as Gazprombank’s European outpost. Unlike its Moscow-based parent, GPB International managed to avoid full EU sanctions for years, which allowed it to serve as a critical conduit for certain energy-related payments flowing between Russia and Europe.
The hangover arrived fast
If 2022 was the party, 2023 was the morning after. GPB International’s profits collapsed roughly 90%, falling to just €6.1 million.
The corporate loan portfolio shrank dramatically, dropping from €609 million in 2022 to €222 million in 2023. The bank severed approximately 40 client relationships during 2023, a wave of offboarding driven by heightened compliance pressures.
US sanctions close the remaining window
Whatever operational flexibility GPB International still enjoyed evaporated in late 2024. The US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Luxembourg entity as part of a broader crackdown on Gazprombank and its affiliates.
For years, European regulators had carved out exceptions for Gazprombank entities to preserve energy payment channels. The OFAC designation effectively cut GPB International off from the dollar-denominated financial system.
