Top banks made $6 billion trading the ruble last year amid Western exodus from Russia, report says

• Wall Street reaped billions from ruble trading in the Ukraine war's first year, Bloomberg reports.
• Banks would buy dollars cheaply and sell them at a markup to Western firms fleeing Russia.

The world's biggest banks tripled their ruble trading revenue last year, as Moscow's war on Ukraine pushed Western firms to accept exchange rates at steep markups.

The top 100 banks made a combined $6 billion, up from the average yearly ruble-trading revenue in the past three years of around $2 billion, according to data from Vali Analytics cited by Bloomberg.

To do so without violating sanctions, Western banks like Goldman Sachs, Citigroup, and JPMorgan Chase turned to lesser-known peers in countries on good terms with Russia, such as Kazakhstan and Armenia, sources told Bloomberg.

As lenders in these regions were free of the trade restrictions that followed Ukraine's invasion, they had access to Russia's dollar market, where greenbacks were selling much more cheaply compared to offshore price points.

With the Armenian and Kazakh banks acting as intermediaries, Wall Street desks were able to acquire these low-cost dollars for a fee, and then sell them at higher prices to companies fleeing Russia.

Many of these firms were willing to secure greenbacks whatever the rate, having already suffered profit and asset losses in leaving the country.

None of this has violated any international sanctions, nor has any institution been accused of malpractice. In many respects, the strategy has helped provide needed liquidity for firms exiting Russia.

Still, sources told Bloomberg that a number of Wall Street firms were wary of being involved in the scheme. Lenders involved in the ruble trade and those that steered clear of it declined to comment to Bloomberg.

Meanwhile, such trade continues even as the high spreads in the war's first year have since moderated, Bloomberg said. The on-shore and off-shore ruble levels have narrowed, while Russian President Vladimir Putin is making it much more difficult for foreign companies to exit the country.

But the difference in ruble price points remains wide enough to remain rewarding for Wall Street to this day, sources told Bloomberg.

The ruble has seen big slides in recent months, especially after June's Wagner uprising led Russians to try and secure alternative currencies. As of Monday morning, the ruble traded at 93.86 to the US dollar.