Wall Street Reaped Rubles As Firms Flee Russia

Wall Street chiefs seeking to explain recent steep drops in trading revenue have reminded investors how lucrative things were a year ago: Goldman Sachs Group Inc. President John Waldron called 2022 “particularly strong.”

Photo Insert: As Western companies and investors rushed to exit Russia amid the Ukraine invasion and the sweeping sanctions that followed, they were desperate to swap their rubles for dollars.

Citigroup Inc. boss Jane Fraser said “Everything was firing on all cylinders.”

Rarely mentioned is one reason for last year’s boom: a billion-dollar windfall funneled from Russia through former Soviet republics to Wall Street’s currency traders, Donal Griffin, Nariman Gizitdinov and William Shaw reported for Bloomberg News.

As Western companies and investors rushed to exit Russia amid the Ukraine invasion and the sweeping sanctions that followed, they were desperate to swap their rubles for dollars.

For Goldman Sachs, Citigroup, and JPMorgan Chase & Co., it was easy money: They found a way to scoop up greenbacks at a low price and then sell them to those fleeing clients for a healthy markup without running afoul of sanctions.

To pull it off, the people said, the Wall Street firms turned to an obscure source with which they had rarely traded dollars before: lenders based in countries deemed “friendly” by Russia and not sanctioned by the US, such as Halyk Savings Bank of Kazakhstan JSC and First Heartland Jusan Bank JSC and Kaspi.kz JSC in Kazakhstan and Ameriabank CJSC in Armenia.

Those lenders were able to buy dollars directly from Russian banks around that country’s local exchange rate, which at times was far less than what was quoted abroad, the people said.

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