Exclusive: Goldman, JPMorgan among banks left holding Russian stocks by sanctions switch

LONDON/NEW YORK, April 22 (Reuters) – A decision last month by FTSE Russell and MSCI to remove Russian stocks from their indexes has left some of the world’s largest banks inadvertently holding potentially valuable positions, several sources familiar with the trades told Reuters.

JPMorgan Chase, Goldman Sachs, HSBC, BNP Paribas and other global banks have had to move Russian stocks and related derivative positions that they had taken to support bets by institutional clients into their own books as a result, five sources, including investors and traders, said.

When conditions permit, the banks could cash out those positions for what some of the sources said may result in sizeable profits.

Reuters could not ascertain the size of the positions because of the opaque nature of derivative trading books, and the sources said that profits were not a given for the banks.

Overall, billions of dollars tracked MSCI and FTSE Russell indexes that included Russian stocks before Moscow’s invasion of Ukraine, which the Kremlin calls a “special military operation”.

The fate of these assets, which has not been previously reported, shows how Western sanctions have had far-reaching and sometimes unintended impacts on the global financial system.

JPMorgan (JPM.N), Goldman (GS.N), BNP Paribas