LONDON Barclays (BARC.L) has lost its commodities trading chief Roger Jones to Swiss trader Mercuria in one of the biggest moves by commodities traders from banks, scrutinized by regulators.
Dozens of traders have recently quit top commodities trading banks such as Barclays, Goldman Sachs (GS.N), Morgan Stanley (MS.N) and Merrill Lynch (BAC.N) to traders such as Glencore (GLEN.L), Vitol, Gunvor and Mercuria.
The outflow is driven by shrinking profits and tighter regulation of banking, which gives trading houses greater scope to trade and to reward success.
However, the departure of a figure of the caliber of Jones, who alongside Isabelle Ealet from Goldman Sachs and David Silbert from Deutsche Bank, is seen as one of the most prominent figures in commodities trading in Europe, is rare.
Barclays has been a star of commodities trading among European banks over the past decade but was overtaken by Deutsche last year after sharp losses in metals.
However, Barclays' fixed-income, currencies and commodities (FICC) trading results were up 9 percent in the first quarter with commodities trading on the rise.
"Barclays' underlying commodities business remains strong and well diversified," said a source close to Barclays. It is not yet clear who might replace Jones.
Jones will become the head of non-oil operations at Mercuria, a senior source close to the Swiss trading house said.
"It is part of a process to bolster the structure of the company as it enters new commodities markets," the source said.
At Barclays for a decade, Jones previously worked with the Mercuria co-founders Marco Dunand and Daniel Jaeggi at Phibro.
Geneva-based Mercuria, founded in 2004, has expanded rapidly from its base in crude and oil products trading and has now an annual turnover of around $80 billion with operations in energy, metals and other commodities.
By comparison, the world's top trader Vitol had revenues of $297 billion in 2011 and No.2 trader Glencore had revenues of $186 billion.
Mercuria is one of the world's top five energy traders and almost 120 million metric tons (132.28 million tons) of oil, coal and gas a year.
The source close to Mercuria said Jones would "effectively be number three" at Mercuria, with a wide-ranging brief to help expand the trading company's operations in non-oil commodities.
Mercuria announced this week a major expansion into base metals with new trading units in London and Shanghai and up to 15 new hires, recruiting Ben Green and Liam Brown, both previously senior metals traders with Goldman Sachs commodities group.
Mercuria's metals trading groups is expected to focus primarily on copper, aluminum, zinc, nickel, tin and lead, with activity in the London Metals Exchange (LME), New York Mercantile Exchange (NYMEX) and Shanghai.
"They (Mercuria) are splashing money around, building up a higher voltage metals team. It wouldn't surprise me if they made more hires," said a senior source at the London Metals Exchange.
The head of a large metals team at another trader agreed, saying Mercuria was adding expertise rapidly, reflecting a trend of merchant-traders diversifying out of traditional niche areas.
Mercuria has also recently started to trade grains and agricultural products and is expected to announce further hires for this market, senior trade sources say.
"For the last five years, metals has been the place to be and it doesn't surprise me that traditional oil traders are getting into the metals space," said the metals team head, who declined to be identified.
Mercuria is also strengthening its financial structure has just hired Goldman Sachs' (GS.N) former co-head of commodities investment, Shameek Konar, to help manage its global portfolio of energy assets.
(Additional reporting by Dmitry Zhdannikov and Susan Thomas, editing by William Hardy)