$Deutsche Bank AG(DB.US) The gap compared to mainstream US banks is too large

Deutsche Bank's stock price fell from around $100 in 2008 to less than $10 in 2019, a cumulative decline of over 90%. The core issues were toxic crisis assets, heavy regulatory fines, strategic mistakes, profit collapse, macroeconomic headwinds compounded by governance disorder and market confidence collapse, forming a vicious cycle of systemic problems.

1. Crisis aftermath dragging down asset quality (2008-2012). During the 2008 financial crisis, it held large amounts of toxic subprime MBS and CDO assets, leading to massive asset write-downs and surging provisions, with investment banking and trading revenues plummeting. During the European debt crisis, high-risk exposures to Italy, Spain and others worsened asset quality. At its peak, derivatives reached over $75 trillion (about 20 times Germany's GDP), with "too big to fail" and liquidity risks sparking market concerns.

2. Regulatory quagmire and heavy fines (2013-2017). Fined over $10 billion cumulatively for violations including Libor manipulation, MBS fraud, and Russian money laundering, severely eroding capital and profits. In 2016, S&P downgraded its rating outlook, raising funding costs and further undermining market confidence.

3. Strategic mistakes exacerbating operational deterioration (2012-2019). The universal banking model became unbalanced, over-reliant on high-risk investment banking while retail and commercial banking provided weak support, with highly volatile revenues. The 2010 acquisition of Deutsche Postbank failed to achieve synergies and instead increased costs, while uncontrolled global expansion drove up expenses. The cost-income ratio reached 93% in 2018, far above peers. After Basel III implementation, its CET1 ratio fell below 6%, forcing deleveraging and contraction, with both scale and profits declining. Frequent management changes and strategic wavering culminated in the failed 2019 merger with Commerzbank, dealing another blow to confidence.

4. Profit collapse and capital crisis (2015-2019). A €6.8 billion loss in 2015 was followed by continued losses in 2015-2017 and 2019, with ROE persistently below industry average and ROA under 0.5%. Fines and losses kept eroding capital while funding difficulty and costs both rose.

5. Macro headwinds intensifying the downturn. Europe's low/negative interest rates squeezed net interest margins, making traditional business profitability difficult. US investment banks and European peers grabbed market share as Deutsche Bank's competitiveness declined. Frequent negative news triggered short-selling waves, trapping the stock price in a "decline - funding difficulty - poor performance" loop.