Deutsche Bank is not a happy camper

Deutsche Bank has been deleveraging. (WSJ, A1) Leverage pre-crisis was 61:1 compared to a European bank average of 39:1 and a US average of 13:1. Now, after selling €11 billion in equity and €5 billion in CoCos and shrinking its book leverage is 21:1, compared to 18:1 for the average European bank and 12:1 for the US. (WSJ numbers) The new CEO John Cryan is making further cuts after the €6.77 billion loss in 2015; his nickname in the bank is “Mr. Grumpy.”

Lower leverage means lower profit (and loss) potential.