(New throughout, adds details on Gmelich’s career, business performance)
By Elizabeth Dilts
NEW YORK, Jan 22 (Reuters) - Justin Gmelich, a longtime executive in Goldman Sachs Group Inc’s bond trading business, plans to retire from the Wall Street bank in March, according to a memo sent by management on Tuesday.
Gmelich has been chief operating officer of fixed income, currency and commodities (FICC) trading since 2017, and before that ran credit and mortgage trading. He joined Goldman Sachs in 1998 and became partner in 2004.
Gmelich is leaving the business at a time of transition.
Bond trading was once a key money-maker for Goldman Sachs, but rules imposed since the 2007-2009 financial crisis, as well as changing customer preferences, have crimped its profitability.
Goldman reported $6 billion in FICC revenue last year, up 11 percent from 2017, but a fraction of the $23 billion the bank generated at the business’s peak. Management is aware that the revenue pie has shrunk industry-wide, Chief Executive Officer David Solomon said last week.
“We will not be complacent waiting for the market to return,” he said. “We are running the business with a clear perspective of its revenue potential.”
The bank embarked on a broad strategy change in 2017 to make up for the decline, partly by pursuing new customers and convincing clients of the investment bank to also trade with Goldman Sachs.
In Gmelich’s current role, he worked with co-heads of the securities business to make FICC trading more electronic and responsive to customer needs. He also helped develop new trading platforms during his time in the credit business, according to the memo, which was signed by Solomon, Chief Operating Officer John Waldron and Chief Financial Officer Stephen Scherr.
Gmelich is one of just a few senior trading executives who lasted through the financial crisis, and has been elevated since then. His departure is one of several changes in senior ranks since it became clear early last year that Solomon would become CEO.
The memo cited Gmelich’s “nuanced understanding of markets, commitment to our clients and passion for our culture.” It did not say whether his role would be filled by another person. (Reporting by Elizabeth Dilts Writing by Lauren Tara LaCapra Editing by Chizu Nomiyama and David Gregorio)