Deutsche Bank spent the decade after 2008 paying for the decade before it. Fines and settlements exceeded $14 billion: $7.2 billion for mis-selling mortgage-backed securities, $2.5 billion for manipulating Libor, $630 million for a Russian money-laundering scheme, and hundreds of millions more across a dozen other matters. Each fine revealed a different failure; together they described a bank whose investment-banking culture had outrun its controls.
The stock told the same story: from over €100 in 2007 to under €7 by 2020. Four chief executives tried to fix it — Ackermann, Jain, Cryan and Sewing — each announcing a restructuring that the next one had to redo. Revenue kept falling as clients left and regulators tightened capital requirements.
In July 2019, CEO Christian Sewing announced the most radical restructuring in the bank's modern history: 18,000 job cuts, a €7.4 billion restructuring charge, a full exit from equities trading, and the creation of a 'bad bank' to wind down €74 billion in assets. The bank that had tried to be Goldman Sachs and Deutsche Bank simultaneously chose, finally, to be smaller.
Deferred the choice to cut risk alongside revenue through four CEOs, until 2019 when it cut 18,000 jobs and exited equities, taking a €7.4B restructuring charge.
The investment-banking culture that generated the fines also generated the revenue, so each CEO deferred the restructuring that would have cut the revenue alongside the risk.
Four CEOs in seven years meant no strategy survived long enough to work; each reset destroyed the momentum of the last.
Regulators in the US, UK and Germany each pursued separate actions, so the bank was fighting on multiple fronts while trying to restructure on none of them.
A bank that generates revenue and fines from the same division cannot fix one without cutting the other. Deutsche Bank deferred that choice through four CEOs and $14 billion in penalties.
Deutsche Bank returned to profit in 2021 under Sewing, with a smaller investment bank and a stronger focus on its German retail and corporate franchise. The stock recovered partially but never approached its 2007 peak. The case became the standard example of how a universal bank's investment-banking arm can consume the institution that houses it.
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