Deutsche Bank Is Back to Square One Again

More than four years after the leaders of Deutsche Bank AG unveiled their first postcrisis strategic reboot, they’re back at square one. It’s the eternal turnaround.

The giant German bank’s core problem is the same—costs are too high, revenue is too low—but there are fewer levers for Chairman Paul Achleitner and Chief Executive Officer Christian Sewing to pull now that merger talks with Commerzbank AG are off. The combination could have helped Deutsche Bank by taking out its biggest domestic rival and lowering its own funding costs by expanding its deposit base. But the obstacles to forging one sturdy institution out of two weak ones proved insurmountable. In a joint statement, the banks’ CEOs cited execution risks, restructuring costs, and the higher capital requirements the combined bank would face.