Lehmann Crash
It was one of the speediest merger integrations in Wall Street history.
Barclays said Thursday that its investment banking unit had completed integrating Lehman Brothers’s North American capital-markets business, just three months after buying them out of bankruptcy.
Indeed, withing days of the deal, Barclays had rebranded Lehman’s building in Times Square, where they will be consolidating all of their offices. But the hard work of integrating systems and the even harder work of integrating teams — and yes, laying people off — appears to have gone much smoother than even some of their own executives expected.
Mergers of investment banks are notoriously difficult because, as the old saw goes, “a firm’s most valuable assets go up and down the elevator.”
While other banks have struggled, Barclays appears to be on stronger footing. Nonetheless, investors have remained somewhat jittery given the recent losses at Royal Bank of Scotland, its biggest competitor in the United Kingdom, and the trouble at firms like Bank of America. Barclays has consistently said that it has appropriately marked the assets on its balance sheet.
In a statement on Friday, Bob Diamond, president of Barclays, said: “Our clients now have the benefit of a fully integrated investment bank able to offer the full array of risk management, financing and advisory products. We are now operating as one firm using our business principles to manage risk, manage costs and stay close to our clients. As we said, we targeted break even for the acquired businesses in 2008, and in fact they are already contributing to the bottom line.”
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