Out of adversity comes opportunity?

Despite a sharply collapsing group share price, Barclays Capital had some good news to share last week, with the announcement that it had completed the integration of the North American businesses of Lehman Brothers. So what does that mean for BarCap FX?

The British bank acquired the US operations of Lehman Brothers after the wider group had filed for bankruptcy in September last year. By October, the bank said it had fully integrated Lehman Brothers' US foreign exchange and commodities businesses under the Barclays Capital name. In FX, sales and trading in spot, forwards and options products resumed, and was integrated with Barclays Capital's existing currency trading.

In the statement issued by the bank last Friday (January 23), it mentioned that in fixed income BarCap's US Treasury Securities business increased its market share as a result of its integration with Lehman Brothers by 38% from 9.2% for the first three quarters of the calendar year 2008 to 12.7% in the fourth quarter, while its Federal Agency Securities business, excluding mortgage-backed securities, increased from 9.9% for the first three quarters of the calendar year to 12.7%, a 28% increase, according to Federal Reserve data.

On a systems basis, the integration involved hundreds of initiatives, including aligning market risk and compliance systems, selecting suppliers, combining email systems, branding buildings, customer statements and trade confirmations, rolling out unified credit risk processes and policies, creating an integrated HR system with consistent titles and grades. Seventy six new product lines are up and running as a result, the bank said.

There's mention of how the bank has benefited in mergers and acquisition, equities and research but no mention of how FX has been affected still. Of particular interest is whether the bank has wound down Lehman's FX e-commerce platform FXLive or merged pieces of it with its incumbent Barx FX platform. All the bank came back with was: "The successful integration of Lehman Brothers' US FX business adds to Barclays Capital's existing strength as one of the world leaders in the currency markets."

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