Three members of Mellon Bank Corp.'s rate risk management group resigned Wednesday to join Pittsburgh rival PNC Corp., industry sources said.
The sources said Mellon's group head, Charlotte B. McLaughlin, jumped to PNC along with two associates, whom they could not identify. The departures were confirmed by Mellon, but the banking company would not disclose the executives' identities.
Though the banking companies involved are relatively small players in the $41 trillion global over-the-counter derivatives market, the developments show that traders are becoming hot properties, even at the regional bank level.
PNC's derivatives operation ranked 43d in the United States at yearend, with contracts totaling $1.7 billion of notional value. Mellon ranked 16th, with contracts worth a notional value of $24.5 billion.
PNC declined to discuss the moves, but did say it is planning to expand its risk management practice as part of a broader push in corporate banking.
"In an effort to expand our capital markets product offerings, we will be establishing a derivatives trading desk to deliver interest rate risk management strategies and products to middle-market clients and financial institutions," a PNC spokesman said.
The departure of the Mellon professionals for a crosstown rival mirrors moves that frequently occur at Wall Street firms.
Bankers Trust New York Corp., for instance, was hit hard by defections following a management shake-up in the derivatives area last year. And in March, Bank of Boston Corp. raided a number of Wall Street and foreign firms to expand its derivatives trading and sales units.
Nonetheless, moves by derivatives professionals to smaller regional firms are rare, said Robert V. Long, principal at Denison Group, an executive search firm in New York.
"I've seen some New York people going to Charlotte to join First Union or NationsBank," he said. But, he added, "in my entire career I've never seen somebody leave a top" investment bank or commercial bank to join a smaller regional firm.
Indeed, the two Pittsburgh operations are far smaller than the top New York firms. The new Chase Manhattan Corp. was the top derivatives bank at yearend, had an estimated $4.7 trillion in derivatives notional value.
