The man who tamed the world’s most troubled bank

Christian Sewing barrelled down a German autobahn to meet clients in a former milltown when a friend called. Credit traders had zeroed in on Deutsche Bank, the lender Sewing had nursed back to health after he took over five years earlier.

It was March 2023 and markets were looking for the next victim after Credit Suisse and two US regional banks collapsed. The cost to insure Deutsche Bank’s debt surged to its highest level since the pandemic.

Teams in the bank’s twin-tower headquarters in Frankfurt scrambled through 15 drafts of a message to reassure customers that the bank was solid.Before they could get the statement out, an unexpected clamour started.

“Deutsche is in robust shape,” research firm Autonomous told clients in an email. “We view this as an irrational market,” Citigroup analysts advised. Even the bank’s regulator, the European Central Bank, blamed the commotion on an illiquid corner of the market. Things swiftly stabilised.

Executives trashed the message and decided to let the market speak for itself.

The episode showed Deutsche Bank’s newfound resilience. But the wobble was also a reminder to Sewing that the German behemoth has yet to fully convince markets that it has jettisoned its reputation as a weak link in the global financial system.

It wasn’t long ago that Deutsche Bank was synonymous with banking scandals, money laundering and controversial clients, including former President Donald Trump and convicted sex offender Jeffrey Epstein. Bankers set up deals for their own advantage that sometimes went against shareholders. The bank had poisoned relations with regulators.

The bank was also known for its big egos and swaggering traders who tried to muscle themselves into the upper echelons of Wall Street. They took huge risks to try to go toe-to-toe with the likes of Goldman Sachs and JPMorgan and sometimes cost shareholders dearly. The bank racked up losses that ran into the billions of dollars on complex market positions.

“What Sewing inherited was such a mess, it will still take time for it to be rebuilt”

Sewing has pulled Deutsche Bank to firmer ground. The bank makes more money on routine transactions for companies and less on wild market bets. That has made revenue more stable, which together with cost controls has returned the bank to profit. The lower risk appetite, executives hope, has made it less prone to scandals.