MOVES-Goldman rejigs FICC leadership

By Steve Slater

LONDON, Nov 8 (IFR) - Goldman Sachs has appointed Jim Esposito and Justin Gmelich as co-chief operating officers of its fixed income, currency and commodities business, as it attempts to reverse a slump in the unit's fortunes.

Esposito and Gmelich will take the newly created positions, which replicates the model Goldman has had in equities for the past several years, according to a memo sent to staff on Wednesday and seen by IFR.

Esposito is co-head of global FICC sales, and his move will leave John Willian as sole head of that business.

Gmelich is global head of credit and mortgages trading.

Jeff Verschleiser will become head of global flow credit, municipals and mortgages trading. He is head of mortgages trading and US flow credit and municipals trading.

Ram Sundaram will assume oversight for the recently established structured finance and lending group in the Americas, in addition to running structured credit trading and being co-head of FICC emerging markets Latin America and EMEA trading.

Goldman has had a torrid few quarters in FICC trading, suffering more than its major rivals from a slowdown in trading and market volatility.

Its FICC revenues were US$4.3bn in the first nine months of this year, down 23% from US$5.6bn at the same stage of 2016. JP Morgan, Citigroup and Bank of America Merrill Lynch have seen FICC revenues decline by 6% on average so far this year, while Morgan Stanley's revenues were up 13% from a year ago.

Goldman's poor showing in FICC has been blamed on a slump in its commodities revenues and because its clients include more hedge funds and asset managers, who have pulled back from the market more than corporate clients, who have traded more actively.

In September Goldman set out plans to lift annual revenues by at least US$5bn, including by getting a US$1bn revenue boost in FICC, even if bond market trading remains challenging, by tapping banks, asset managers and insurance companies, and strengthening its focus on corporate clients. (Reporting by Steve Slater)