Unlike previous rounds of restructuring, cuts and strategic repositioning, this one fundamentally cuts at the identity Deutsche has built since it bought Bankers Trust in 1998. It will no longer aim to serve US clients doing US business, but will, instead, like many of its European peers, restrict its US ambitions to cross-border or multinational coverage.
It will find angles and pick niches, not square up to the Wall Street banks on their own turf. It will cut its US rates business too — an operation where the margins might be thin, but which underpins any credible global markets effort. Global equities get a “review”, along with balance sheet and client list cuts.
Deutsche Bank will once again do what it says on the tin — serve German and European clients, particularly with financing and treasury solutions.
Sewing, to be fair, had two bad options to choose from. Deutsche’s US business is expensive and sub-scale. It is trapping capital and resources. But a retreat home isn’t appealing either. Much of German banking is low margin, with profits capped by an extensive state-supported sector, and retail and corporate customers alike overbanked.
Whether this is a continuation of predecessor John Cryan's "Project Colombo" strategy is an academic point, with the homophonous TV detective summoning to mind images of smart operators stuck in a shambolic outfit; of a franchise that peaked many years ago; and where, as far as at cuts go at least, there always seems to be "just one more thing."
But there can’t help but be a twinge of sadness felt at further damage to a once-mighty firm. The apparent renaissance of Barclays, after its own years of restructuring, and its ability to continue the fight in US corporate finance, shows that turnarounds can work when done right.
For Deutsche, though, it’s back to being a European bank. The last 20 years have been a blast.