• Deutsche Bank, under the guidance of Edson Mitchell, expanded its investment banking and managed to climb its way to become Europe’s most valuable bank
• The bank overvalued its worth during the financial crisis, starting a chain of problems
• Internal conflict and a terrible company culture are still affecting the bank

German lender Deutsche Bank has reported its third straight annual loss of $621 million for 2017, a total shift from what it has achieved a decade before. For many years, the bank has been a prime example of success to European banking, reaching its peak in 2007 to become the world’s biggest bank. Even during the 2008 financial crisis, Deutsche Bank fared better than its competitors, and it managed to remain seemingly stable until 2015, when it reported a net loss of more than $6 billion.

Aggressive growth turned rapid decline

Deutsche was already a major player in the German baking industry in 1995 but was still left behind by Wall Street giants such as JPMorgan, Merrill Lynch, and Goldman Sachs. When Edson Mitchell came on board and took over as chief executive officer of the bank, Deutsche Bank took several aggressive high-staked steps in investment banking, integrating itself with London bank Morgan Grenfell, selling off corporate shareholdings, poaching financial experts from rival banks, and purchasing US Bankers Trust in 1999. Those decisions paid off well and the bank successfully became a major player in the financial industry. Deutsche Bank’s quick rise can be attributed to its ability to foresee long term-growth, and willingness to take-on high-risk investments. Unfortunately, their willingness to gamble also became the reason for their troubles.

In 2010, the bank was investigated for overpricing assets in large portfolio derivatives, which overvalued the bank by $1.5 billion and effectively softening losses they incurred dur...

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Keywords:Regulation, Transaction Banking, Investment