Hopes of salvaging hundreds more jobs in Britain from the collapse of Lehman Brothers were dashed yesterday as the administrator made 750 fixed-income bankers redundant after failing to find a buyer for the division.

PricewaterhouseCoopers (PwC) said that it was abandoning the sale of the European debt and credit unit after exhausting all avenues. It is also trying to offload Lehman’s asset management business, with about 600 staff.

It is understood that Nomura, the Japanese investment bank that bought Lehman’s equities and advisory businesses, had explored the idea of buying the unit but balked at a requirement that it rehire all the bank’s frontline staff. Nomura has already commited to take on at least 2,000 former Lehman bankers.

Sources said that other potential buyers had expressed an interest in the division, which traded securities as well as underwriting new debt issues, but had been deterred by the amount of regulatory capital that was needed to support it.

Dan Schwarzmann, one of four PwC partners handling efforts to sell Lehman’s European assets, said that he hoped to sell Capstone Group, the bank’s mortgage servicing operations, within the next four to six weeks. It is solvent and attached to several Lehman loan books totalling more than $1 billion (£562 million). If possible, it will sell them on as a single asset.

Lehman Brothers filed for Chapter 11 protection from creditors in the United States just over a fortnight ago, while Lehman Brothers International went into administration in Europe.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive