NEW YORK Goldman Sachs Group Inc (GS.N) global commodities trading co-head Magid Shenouda is leaving after 14 years at the bank, according to an internal memo seen by Reuters, the Wall Street firm's second senior-level departure in as many weeks.
London-based Shenouda, who has run the commodities trading business for the past two years alongside New York-based Greg Agran, had been credited with helping build out Goldman's physical energy trading franchise, a unit of the bank under intense political and regulatory scrutiny in the United States.
Shenouda's departure came just a week after the reported retirement of Peter O'Hagan, who was global head of commodities sales. The bank named two people to replace him, with Colleen Foster heading sales in the Americas and Martin Wiwen-Nilsson running operations in Europe and Asia, website SparkSpread reported earlier.
Goldman's J Aron commodity division, a century-old enterprise the bank has said is "core" to its business, has long been considered one of the most coveted employers in the commodities business, with extensive global operations.
Goldman President Gary Cohn ran J Aron for a period in the 1990s, and Isabelle Ealet, now the co-head of the securities division, was in charge for much of the 2000s. It has about 250 employees.
But it now faces unprecedented regulatory pressure amid allegations its metals warehousing business might have inflated aluminum prices. The Federal Reserve is considering ways to pull back Wall Street's deep involvement in raw material markets, including the ownership of assets.
The bank's physical metals desk has lost three key players since March as Wall Street's No. 1 bank for commodities has struggled to expand in the capital-intensive and high-risk business it first entered in 2010.
At the same time, revenues at Goldman and other banks have been shrinking as lower market volatility and tighter regulation hurt profits.
Overall, commodities revenues fell more than 60 percent year-on-year in 2012 to $600 million. Compared with 2009, when the bank booked a record $4.5 billion in revenue, that was down almost 90 percent, according to its SEC filings.
Goldman said the numbers do not fully reflect the way it runs its business.
Shenouda joined Goldman in 1999 from privately held Swiss-based commodity trading house Trafigura, where he traded fuel oil. He went on to run Goldman's European crude oil and products trading business, as well as European power and gas. He was made partner at the bank in 2008, the memo said.
"He has been responsible for driving several key acquisitions, as well as the expansion of our business activities into new regions and products, including the build-out of our Energy, Coal, Freight and Emissions franchise," the co-heads of the securities division, Ealet and Pablo Salame, said in the memo.
It was not immediately clear if the bank will look to replace Shenouda, but some traders say it would be logical for his co-head, Agran, to run the business alone.
Shenouda's plans were not immediately known. The departure was first reported by SparkSpread.