JEREMY ISAACS was guest speaker at a private lunch last Wednesday in London’s Savoy hotel for 350 guests of the property tycoon Gerald Ronson.

Isaacs, chief executive of Lehman Brothers Europe & Asia, had been asked to speak at the annual event by Ronson. It was a request he could not refuse.

He may be unknown outside the City, but Isaacs has earned his place at Ronson’s top table. Over the past decade he has built Lehman Brothers’ international arm into a business with annual revenues of more than $5 billion (£2.9 billion).

This week he will announce the next stage of his expansion strategy, with plans to open offices in Dubai and Qatar. Within five to ten years Isaacs hopes that half of Lehman’s revenues will be generated outside America.

Having cemented its position in Europe, Lehman is now taking on the big boys of Wall Street in far-flung corners of the world. But can Isaacs repeat the success of the last decade? He joined Lehman Brothers in 1996 from rival Goldman Sachs. But within two years the firm was in crisis. By October 1998 America’s Securities and Exchange Commission, the Wall Street watchdog, was forced to step in after rumours swept the market that Lehman was in financial difficulty.

The firm — it was said — was about to be forced into liquidation or into the arms of another financial institution in a rescue takeover.

“We came close to the edge,” said Isaacs. “People were walking into my office and asking if they should still go ahead and buy the new house they wanted. I told them there was nothing to worry about.”

Lehman Brothers survived — in fact 1998 turned out to be a record year and Isaacs believes the firm emerged stronger.

“That year was incredibly important. It crystalised our culture. It made us recognise our core values. It also made us believe we were fighting against the system,” he said.

Key to that culture has been the fact that staff own a large stake in the business. A high proportion of bonuses are paid in stock. and staff own more than a third of the business.

Within months of overcoming the crisis, Lehman was investing in Europe. “We built a platform,” said Isaacs, who says that there is still enormous potential to be wrung from it.

Lehman Brothers may be best known for its fixed-income business, but Isaacs has focused on building a much wider company. For example, he said, Lehman Brothers is the No1 dealer on the London Stock Exchange (measured by volume) and one of Britain’s largest sub-prime mortgage lenders, providing loans to the self-employed and those who are a high credit risk.

In 2004 he poached Anthony Fry from Credit Suisse to head Lehman’s British investment-banking division.

“It was illogical that our M&A franchise was so weak,” said Fry who spent the first year at Lehman building a new team.

That team is now involved in some of the biggest deals in London, including the bidding battle for the London Stock Exchange. Lehman also advised the bidder for Somerfield and has sold a string of pubs for Scottish & Newcastle.

In addition, the bank has been involved in several smaller deals, including the flotation of Clipper Windpower, an alternative-energy company, and IP2IPO, the technology firm.

As Lehman Brothers has prospered so has Isaacs. In 2001 a Securities and Exchange Commission filing by Lehman Brothers included details of Isaacs’s £14m annual salary and share-options package. The resulting headlines embarrassed Isaacs and he has since ensured that his salary remains private.

But it is fair to assume that he has not taken a pay cut since then and the value of Lehman’s stock has risen nearly sevenfold in the past eight years.

As one of the longest-standing members of Lehman Brothers’ executive committee, he now ranks as one of the most senior Britons on Wall Street.

Lehman’s executive committee meets at least twice a week, with Isaacs participating by video conference from his office in Canary Wharf.

The video-conference screen dominates his 30th-floor office, which overloooks the Millennium Dome and the Thames. There are family photos on the walls and a cartoon that depicts Isaacs as a boxer flooring a “megabank” rival. On his desk is a Lehman baseball cap and a Bloomberg screen.

Isaacs visits New York at least once a month but still regards London as home. This week he goes to Florida to take part in a think tank involving the firm’s top staff. The dress code said casual, but even after 10 years at an American bank Isaacs still does not know what that means.