The acquisition of the bulk of Lehman Brothers in London by Nomura International will take longer to move into profit than originally budgeted, according to the man who orchestrated the groundbreaking deal.

Sadeq Sayeed, chief executive of Nomura in Europe, said that he now expected the business to continue to make losses until early in 2010. Originally the target break-even point was October/November 2009.

Mr Sayeed stunned the City in September with his bold, opportunistic purchase of the investment banking and equities businesses of the collapsed American investment bank for a token $2, saving thousands of jobs and potentially catapulting Nomura into the investment banking big league.

But the collapse in financial markets since and the time required to woo and retain old Lehman clients mean that profitability will take longer to achieve, especially because costs will be considerable as a result of guaranteed bonuses promised to Lehman high-flyers to persuade them to stay.

“We think it will now take a bit longer,” Mr Sayeed told The Times. “We now expect to break even by the early part of 2010. I had a suspicion that the markets would be pretty darn bad, but I had no idea they would be this bad.”

Nomura is moving many of its front-office staff from its old St Paul's headquarters to the Lehman building in Canary Wharf, while at the same time shedding about 1,000 posts out of the combined 4,500 over the next few weeks.

Mr Sayeed said that the process of combining the two companies had gone extremely well, with the main “transition” completed in 70 days, ahead of his target of 90 days. Management structures were in place, almost every equity product line was being traded and salespeople were on the phones. “We have hit the ground running,” he said.

Thirty per cent of the $4.5 billion (£3 billion) raised on behalf of the client Mitsubishi UFJ, the Japanese financial services group, this month was achieved through the newly acquired Lehman businesses in Europe and Asia - a direct benefit of the acquisitions.

Mr Sayeed denied that old Nomura staff were being unfairlytreated as a result of the Lehman deal. Some feel that they are shouldering more job cuts and are less likely to receive bonuses because of the promises made to former Lehman staff. Mr Sayeed said that the fresh job cuts would be shared according to the size of the respective workforces, which suggests that about 400 jobs would go from old Nomura and 600 from Lehman.

He conceded that Nomura had a high cost base after guaranteeing bonuses to some former Lehman people, saying: “We are systematically only trying to keep and motivate the best. Who gets paid and who gets guaranteed is determined entirely by competence.”

Nomura, as a pure securities house with no commercial banking operations, would have an advantage over rivals trying to manage the conflicts of interest arising from being big lenders to clients, Mr Sayeed argued.

He said that equities, hybrid securities such as convertibles and derivatives were going to be the most important part of the business. “We are going to be the broker, the worldwide broker of choice, unconflicted with debt. It's going to be our sweet spot.”

He played down concerns that his newly acquired team might make the same mistakes that sank Lehman. “The people we took on in Asia and in Europe are not the people who destroyed the Lehman business,” he said. They had in fact “rebelled” against what he called “a cabal at the top”.

“Our goal is to be like what investment banking used to be before the last ten years — an old-fashioned originator and distributor,” he said.

“And if we break even by 2010, one thing you can be sure of is that we will be ahead of our competitors.”

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