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Departures at JPMorgan, Deutsche Bank as banks downsize metals teams

Keywords: Tags  JPMorgan, Deutsche Bank, redundancies, metals, trading, Steel First, Mark Burton

LONDON — JPMorgan Chase & Co. made some members of its metals sales desk in London redundant this past week in the latest in a series of departures from major banks and brokerages, market sources have told AMM sister publication Metal Bulletin.

Deutsche Bank AG senior options trader Russell Plackett and other members of the trading team have also left in recent weeks, market sources said April 22.

"The last time we had a string of departures like this was back in 2008," a source at a Category I brokerage told Metal Bulletin.

Other recent departures include Goldman Sachs metals trader Scott Evans, who left the company’s New York office earlier this month.

Four base metals traders also left brokerage firm Marex Spectron in February, while managing director and global head of sales Gavin Prentice left the firm last month. Nick Riley, Steve Lawson and Paul Yates are rumored to be joining ED&F Man Holdings Ltd., while Martin Thompson is thought to be retiring, the broker said.

The latest departures at JPMorgan come as the bank and rivals, including Goldman Sachs, continue to reduce their exposure to commodities markets, responding to falling revenues from activities in the sector.

Goldman Sachs’ daily value-at-risk in commodities was $22 million in 2012, down by nearly a third from the previous year. During the same period, revenues from commodities fell to $575 million, down from $1.58 billion in the previous year.

JPMorgan does not provide a breakdown of its performance in individual markets, but its total exposure in "commodities and other" assets, as measured by daily value-at-risk, was $15 million in the first quarter of the year, down 29 percent year on year.

But while the redundancies on the sales desk reflect weaker conditions in commodities markets, they should also be viewed in light of the bank’s investment in its electronic trading platform, a source at a Category I bank told Metal Bulletin.

"Commodities have gone out of fashion this year, but the other side of it is you just don’t need that many people on the phones to take orders anymore. A lot of the clients who are doing smaller volumes can do so exclusively on the screen now," he said.

"Obviously, you need those guys to win new business, but in this environment, there’s not really much business to win," he added.

JPMorgan and Deutsche Bank declined to comment. 

A version of this article was first published by AMM sister publication Metal Bulletin.

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