The administrators of Lehman Brothers' European operations have fully separated its IT from Barclays Capital and Nomura - which bought parts of the collapsed bank in 2008 - as they finalised steps in the remaining businesses to retire what had been cutting edge systems.

PricewaterhouseCoopers said that two and a half years after Lehman went bust, the unsold operations had achieved “full independence” of IT and infrastructure service agreements. The move marks a historic technology separation and shutdown for what had become, over a 158-year history, one of the world's largest and most technologically advanced investment banks before it crashed into huge financial failure.

According to newly released documentation seen by Computerworld UK, some 2,000 remaining applications at Lehman have been rationalised to 100, cutting the IT maintenance budget from £200 million to £25 million, as part of a simplification plan intended to enable the bank to operate more cheaply as business is wound up. Lehman once had a colossal one billion dollar annual IT spend, including vast budget allowances for new projects.

Lehman will continue to be steadily wound down, PwC said. Administrators have warned that this could take decades to complete – and of the current 495 staff in the remaining operations, nearly a third still work in IT and are expected to remain there on permanent contracts.

Barclays Capital, which owns the US banking and trading operations of Lehman, said a year ago that it had completed their IT integration. Nomura is understood to have completed its own systems integration, relating to the European investment banking and Asian operations that it acquired.

Lehman was once seen as an IT innovator, and Nomura and Barclays Capital are said to take great pride in some of the trading systems they have acquired by buying parts of the bank. In 2007, the year before its collapse, Lehman's IT costs rose 18 percent year-on-year to reach $1.1 billion, reflecting increased expense from the continued expansion of its investment management platforms.

It had also been heavily involved in a number of technology-related projects in the City of London. These included its joint venture with the London Stock Exchange, a dark pool platform called Baikal.

PwC said that its administration efforts for Lehman included setting a “strategic roadmap for systems development” and data needs, negotiating IT outsourcing, application development for managing money and stock, and IT security. Some IT services had been delivered by Nomura and Barclays Capital, and bringing them back in house was delivering a £15 million annual cost saving for the remaining Lehman business operations being wound down, PwC said. The project was recently commended at a management consultants' awards ceremony.

“Very significant progress has been made over the past six months," said Tony Lomas, joint administrator. "A further £2.1 billion of client assets have been returned to their owners, making a total of almost £13 billion to date, and another £1.6 billion of house assets have been realised, bringing total realisations to £10.7 billion.”