Deutsche Bank Rating Cut by Fitch as Cryan Turnaround Stalls

John Cryan is facing increasing skepticism he can revive growth at Deutsche Bank AG as the lender struggles to win back clients and market share after last year’s slump.

Deutsche Bank had its long-term credit grade cut one level by Fitch Ratings late Thursday, which said the lender will take longer to revive growth under a turnaround plan unveiled in March. That came a week after Autonomous Research LLP said the lender may be “beyond repair” unless there’s a “miracle” boom at its once-mighty bond-trading business.

Cryan is struggling to boost earnings as the Frankfurt-based lender undertakes its third revamp in as many years. The CEO brought the bank back from the brink in late 2016 by settling misconduct lawsuits and raising 8 billion euros. His plan to restore “modest growth” by pivoting Europe’s largest investment bank to corporate clients and emphasizing its German roots was thwarted when the lender suffered its weakest revenue in 3 1/2 years in the second quarter.

“We no longer expect revenue to demonstrate any clear signs of franchise recovery this year, and we expect necessary further restructuring costs to continue to erode net income,” the Fitch analysts wrote in a statement Thursday.

The company’s stock fell 0.3 percent to 14.33 euros and has declined 7 percent this year, the second-worst performer in the 46-member Stoxx 600 Banks Price Index. The company’s 6 percent perpetual bonds were little changed.

Read more: Deutsche Bank’s Cryan Is Finally Having Some Fun. Should He Be?

Fitch said low volatility and persistently low interest rates, especially in Europe, continue to weigh on the bank’s top line, and it will take longer to reverse a loss in market share the bank experienced at the end of last year, when some clients stopped doing business with Deutsche Bank amid speculation about its capital strength.

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