* BMO precious metals team set to become one of New York's biggest
* Scotiabank has been shrinking precious metals business
* Scotiabank's client book draws competitor interest
LONDON/TORONTO, Sept 28 (Reuters) - Canada's Bank of Montreal (BMO) has poached a team of six precious metals traders and salesmen in New York from Bank of Nova Scotia (Scotiabank), which is pulling back from the market, five sources familiar with the matter said.
The hire boosts BMO's New York metals team to around eight people, making BMO's team one of the biggest in the city, the sources said.
Canada's Scotiabank, whose ScotiaMocatta metals arm has long been the world's biggest lender to the physical precious metals industry, has been moving ahead with plans to halve the size of its metals business after a failed sale.
Banks including BMO's Canadian rivals Royal Bank of Canada (RBC) and CIBC, traditionally strong in metals thanks to Canada's large mining industry, have been lining up to poach ScotiaMocatta's key staff or clients.
"BMO has a good mining franchise and has always coveted Mocatta," one of the sources said.
As Scotiabank began to retreat, BMO made building its presence in precious metals one of the three top objectives of its mining division, another source said.
BMO has hired Bimal Das, ScotiaMocatta's head of sales in the Americas, along with Tomas Gargantini, John Fox, Anuj Kakar, Harry Lampart and Russell Brown, the sources said.
Reuters was unable to reach the six sales and trading staff for comment. The five that had LinkedIn accounts did not respond to messages sent via the social media platform.
The men left ScotiaMocatta in recent weeks and have not yet started work at BMO, they said, adding that BMO was likely to use the new team to expand into precious metals leasing and shipments.
BMO is Canada's fourth-biggest lender. Scotiabank is the third-biggest. Both banks declined to comment.
Before its restructuring, sources had estimated the value of ScotiaMocatta's leases, credit lines and consignment lending of precious metal was estimated at $8 billion, dwarfing others in the market.
It had more than 60 trading and sales staff around the world, sources said.
The defection leaves Scotiabank with fewer than five people in metals in New York. Its managing director for North America, Tim Dinneny, left in mid-May.
ScotiaMocatta's client book has attracted interest from competitors including banks JPMorgan and ICBC Standard , brokers INTL FCStone and trading house Sumitomo, sources have said.
But Canadian rivals to Scotiabank have been among the most active. RBC hired two former ScotiaMocatta staff this year in London and CIBC added a new head of precious metals trading in New York. TD has expanded its metals unit in recent years with several hires.
"The Canadians are moving the most aggressively," said one of the sources. "Others are taking advantage, but they already have established (precious metals) franchises. The Canadian banks want to grow their businesses."
JPMorgan and Sumitomo declined to comment. CIBC and RBC confirmed their recent hires and did not comment further. TD and ICBC Standard did not respond to requests for comment.
(Reporting by Peter Hobson, Pratima Desai and John Tilak Editing by Veronica Brown and Edmund Blair)