European Banks Are Leaving the Markets to the Americans

Sometimes small changes speak loudly. Deutsche Bank AG’s new chief financial officer, Raja Akram, put the German lender’s consumer and asset management businesses before its corporate and investment banking units in his first earnings presentation last week. Akram, who joined from Morgan Stanley last year, wants Deutsche Bank to earn a smaller share of its profit from trading and dealmaking.

The shift highlights an important message not only for Germany but Europe as a whole: The region’s big lenders are all limiting how big they want to be in investment banking. Europeans have spent years strengthening their balance sheets and rebuilding profitability, and there had been some hopes that they might start retaking market share from their American rivals. But Wall Street firms are getting more competitive, helped by a White House hot for deregulation, and they’re going to increase their dominance of the industry everywhere.