At least 15 BofA global commodities staff, including 2 senior execs, leave

Wed Mar 23, 2011 5:10am EDT

* Departures include Asia-Pacific MD and co-global head of oil

* 2nd round of departures from BofA commodities business in 6 months

* Trading environment volatile amid high prices

By Yaw Yan Chong

SINGAPORE, March 23 (Reuters) - Two senior executives are among at least 15 trading staff from Bank of America Merrill Lynch's (BofA) global commodities and energy business who left the company in the past three to four weeks, three sources familiar with the matter said on Tuesday.

A BofA spokesmen declined to comment.

This is the second time in about six months the bank's commodities business has suffered mass departures.

The managing director of commodities business for Asia Pacific, Diego Parilla, and the co-head of global oil trading, Mitch Rubenstein, both of whom have been in their positions for about three years, left in the past two to three weeks, said the sources, who asked not to be identified because they were not authorised to speak to the media.

The other departures are mostly from the bank's Power and Gas division as well as some sales staff, with four to five personnel from each of its three trading centres in Singapore, London and the United States.

"This is the second time that there are mass departures from BofA in six months, involving their commodities business. The first time, it was mostly people from the U.S. and Europe while this time, it's quite distributed globally," one source said.

"Most of those who left are from the power and gas division, including two from the Singapore office, which looks after the Australia market, while others are sales staff whose jobs are to bring in customer flows from end users."

Those who left are presently on gardening leave of one to three months, the sources said.

Rubenstein, an oil industry veteran who joined Merrill Lynch as its global head of oil trading in 2008 before it was acquired by BofA during the global financial crisis, had introduced the trading of physical oil, mainly crude.

Following his departure, former co-head Thomas Andersen is now the global head of oil trading.

Parilla, a Merrill Lynch veteran, had been the managing director of its Asia-Pacific commodities business since 2009, appointed to the job after the BofA acquisition.

The sources said a replacement has yet to be named.

The latest departures follow a round last September, when another 15 staff from the bank's commodities division, grouped under its global banking and markets division, left.

At the time, it was also reported that BofA would lay off less than 5 percent of its investment banking staff, with the cuts being the first significant organised reduction in the division's workforce since BofA bought investment bank Merrill Lynch in January 2009 during the financial crisis.

The departures at BofA follow similar cuts by Japan's largest brokerage, Nomura Holdings Inc , to its global commodities and energy business this month.

These moves have come on the back of expansions by banks, such as ANZ Bank, Macquarie, Standard Chartered and Citigroup, in the Asian energy and commodities sphere in the past one or two years after the global financial crisis.

Most banks operate their commodity-trading desks on a combination of hedging volumes from customers, mostly end users, and their own proprietary trading.

In the oil sector, end users such as airlines, shippers and refiners, were still recovering from the financial crisis and customer-flow volumes were at moderate levels, traders said.

The trading environment has also been difficult lately, they added, with crude benchmarks at their highest levels for more than two years and their most volatile in 11 months.

The implied volatility for at-the-money (ATM) crude -- which tracks the expected price movement based on options premiums -- rose above an average of 40 percent this month and peaked at 42.7 percent, its highest since last April.

(Reporting by Yaw Yan Chong; Editing by Clarence Fernandez)

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