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) -- Investment banking is dead. Long live investment banking!

Barclays Plc


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shares got a huge pop after the company reported strong 2009 results on Tuesday. The company's Barclays Capital business, which houses its investment banking operations, reported total income of £11.6 billion for 2009, compared to £5.2 billion in 2008, before adjustments from credit and other impairments in both periods. The giant U.K. bank attributed that performance in part to the "successful integration" of Lehman's North American businesses.

How much of that boost comes from the Lehman acquisition is hard to say.

Goldman Sachs

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earned $22.13 per share in 2009 versus $4.47 per share in 2008.

Morgan Stanley

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lost 93 cents per share in 2009 versus a $1.26 per share loss in 2008.

Barclays and Lehman had significant overlap, with both institutions being far stronger in fixed income than equities, although Lehman was further along than Barclays when it came to diversifying into equities and advisory businesses.

Still, Lehman was so large and diversified, Barclays surely found at least a couple of niche areas worth hanging onto, much as

JPMorgan Chase

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soon realized it has an unexpected goldmine in Bear Stearns' energy trading operations after it scooped up the reeling institution in 2008.

Before lenders and counterparties lost confidence in Lehman, sending it into the downward spiral that led to its Chapter 11 bankruptcy protection filing, it was one of the premier investment banks in the world. Many business school graduates considered it a more attractive place to work than even Goldman Sachs.

That was not simply because it got fat on real estate lending. It had assembled plenty of talented executives and businesses. Now that the threat that overnight lenders will abandon them is gone, it makes sense that at least some of these businesses, which Barclays bought for next to nothing, should be thriving again.


Written by Dan Freed in New York