Deutsche Bank Loses Ground in Leveraged Finance Deals

Deutsche Bank has lost ground in the leveraged finance deals market, with a decline in market share and profitability. The bank has shifted its strategy to focus on more selective, high-margin deals, and has also experienced a loss of talent due to this change. In the first half of 2023, Deutsche Bank's earnings in European leveraged finance declined by 35% to €74 million, while US earnings fell by 27% to $145 million.

Deutsche Bank, once a dominant player in the leveraged finance deals market, has seen a significant decline in its market share and profitability in recent years. According to data compiled by Bloomberg, the German bank has slipped from its top position in 2014 to the eighth position in the first half of 2025, handling just 3.6% of global deals [2].

The bank's struggles in leveraged finance can be attributed to several factors. Chief Executive Officer Christian Sewing's strategic cutbacks and regulatory pressure to shrink the business have contributed to a decline in the bank's market share. Additionally, the shifting market dynamics and increased competition from private lenders have made it challenging for Deutsche Bank to maintain its position [2].

The bank has responded to these challenges by shifting its strategy to focus on more selective, high-margin deals. However, this change has also led to a loss of talent. Notable departures include Ludovic Ingelaere, who went to Citigroup Inc., and Daniel Stevenson, who joined Hayfin Capital Management. These departures have left an impression across the industry that Deutsche Bank is no longer the leveraged finance behemoth it once was [2].

In the first half of 2025, Deutsche Bank's earnings in European leveraged finance declined by 35% to €74 million, while US earnings fell by 27% to $145 million [2]. The bank's Chief Financial Officer, James von Moltke, attributed these declines to a weaker debt capital markets quarter and an even weaker leveraged-debt capital markets quarter [2].

Despite these challenges, Deutsche Bank has been working to refill its ranks with experienced talent. Earlier this year, the bank hired Peter Yune, a high-yield trader from Bank of America Corp., and Jackson Merchant, who rejoined from Mizuho Financial Group Inc. [2].

RBC Capital Markets has recently upgraded its outlook on Deutsche Bank, reflecting growing optimism for the German lender. The investment bank bumped up its price target and earnings forecast, citing solid cost savings and strengthening profit trends [3]. RBC expects at least a 12% return on tangible equity for Deutsche Bank, setting it up for growth as Germany's economic outlook improves [3].

In conclusion, Deutsche Bank's declining market share in leveraged finance deals is a reflection of the challenges it has faced in recent years. However, the bank's recent strategic shifts and talent acquisitions suggest that it is taking steps to regain its position in the market. Investors and financial professionals should keep an eye on Deutsche Bank's progress as it navigates these changes.

References:
[1] https://www.reddit.com/r/EU_Economics/comments/1mbue4q/deutsche_bank_is_losing_its_edge_in_leveraged/
[2] https://www.bloomberg.com/news/articles/2025-07-28/deutsche-bank-is-losing-its-edge-in-leveraged-finance-deals
[3] https://finimize.com/content/deutsche-bank-gets-a-vote-of-confidence-from-rbc