You read that title right. Criticism of the German lender – the bank everyone loves to hate – has moved past the rational to the ridiculous.

It isn’t fashionable to pen an homage to Deutsche Bank at the moment, and that is certainly not what I intend to do. And yet the hyperbole built into every «observation» about the lender is getting tiresome.

Are we able to take a more measured approach to this immensely polarizing, yet – and I will just come out and say this – inherently valuable institution? I believe we can, and we must, try.

Slashed Bonuses

By no means the most grave criticism levelled against the bank, it is nonetheless the most recent so we start here. After awarding $2.2 billion in bonuses – by definition a variable component of pay – in 2018, Deutsche Bank is expected to cut (I would argue using the word «slash» in this case behoves only the tabloids) the pool by 10 percent in 2019.

Let me first point out that the fixed part of compensation – the base salary as opposed to the bonus – was raised for many Deutsche bankers as the firm went through the last couple of years of turbulence. In effect, the company is absolving them of the need to take any risk on its behalf.

We Should be Alarmed

Also, we do not as yet know, that high performers will be paid less this year than they were in the previous year. We will only know this definitively at the middle of March when bonuses are actually paid out. A senior banker at the wealth management unit, assures me – off the record – that the brunt of the cuts will be borne by employees «who just meet targets or are below target.»

If that sounds unreasonable, we should be alarmed because an MD at an American bank that is considered a leader in its industry has confirmed it is doing the same. And has done ever since the crisis.

What’s more, a study by the Options Group estimates investment banks across the street will cut bonuses by 4.1 percent. The scaremongering that bonuses have «evaporated» and will lead to an exodus of rainmakers at Deutsche, is tenuous at best.

Humbler Attitude Towards Regulators

When a stock loses 80 percent of its value over the last five years, 50 percent in the last year alone, it makes for a compelling headline. It also begs some analysis. Deutsche stock spiralled downwards in 2017, a reflection of the uncertainty both within and without the bank which then appeared to have turned a corner twelve months ago – identifying the businesses needing triage and adopting a humbler attitude towards regulators.

However, the stock continued to fall, losing as much as 50 percent in the last year, with the biggest fall coming as BaFin regulators raided the bank’s Frankfurt offices. Tempting as it was to get drawn into the drama, news outlets and investors alike would have done well to remember that the raid was attempting to find evidence to substantiate allegations of errant behaviour in the past that may or may not lead to a fine that may or may not be paid out of reserves earmarked by the bank for exactly such a scenario.

Exceptional Performance