Investors are questioning the investment-banking model and prospects of Lehman Brothers Holdings after the same collapsed under $613 billion of debt two years ago.

Only Goldman Sachs Group and JPMorgan Chase, two of the 10 banks with large capital-markets business units, are trading close to their price on September 12, 2008, the last trading day before Lehman filed for bankruptcy.

From Timesofindia.indiatimes.com:

“The fundamentals of their businesses aren’t going to be anywhere near as good as they were pre-Lehman,” said Jon Fisher, a portfolio manager at Fifth Third Asset Management in Minneapolis, which handles more than $18 billion. “Every aspect of the business has been damaged.”

The collapse of Lehman, the fourth-biggest US securities firm when its 158-year history ended on September 15, was the most dramatic and controversial event in the financial crisis. The bankruptcy and the economic damage that ensued reduced the number of competitors in the banking industry and resulted in new regulations that set limits on banks’ activities.

The earnings outlook for the world’s biggest Wall Street banks remains pallid compared with profits in 2006, the year that preceded the onset of the credit crisis. Estimates for 2011 earnings per share are lower than 2006 for all except JPMorgan, according to data compiled by Bloomberg. Citigroup’s 2011 EPS is forecast to be 89% lower than in 2006, while Bank of America and Zurich-based UBS AG will probably fall more than 60% below 2006 levels on a per-share basis, estimates show.

Citigroup has lost 78 percent while Bank of America has lost 59 percent and there is more than double the 10 percent drop in Standard & Poor’s 500 Index over the same period.