When Deutsche Bank AG tried to sell $4.3bn in debt for a private equity firm buying two gambling companies, investors weren’t enthused.

The German bank ended up having to sweeten terms to get it done, offering better pricing for investors and adding features that protect them if things go wrong.

That deal — to support Apollo Global Management’s purchase of an International Game Technology Plc division alongside gambling machines company Everi Holdings Inc — is not the only leveraged-finance transaction Deutsche Bank has overseen that’s struggled lately.

Once known as a stalwart in that business — placing among the top five in league tables — Deutsche Bank has lost its lustre over the past several years. It has sunk in market share and gotten tangled up in a number of ugly deals due to strategic shifts under Chief Executive Officer Christian Sewing combined with regulatory pressure to shrink the business, people familiar with the matter said.

That has left Deutsche Bank putting a limited amount of capital toward a handful of riskier, fee-heavy transactions, said the people, who were not authorised to speak publicly. The dynamic has also led to an outflow of talent that management is now trying to reverse, some of them said.

A Deutsche Bank spokesperson declined to comment.

So far this year, the bank ranked No 8 in leveraged finance, leading 3.6% of deals globally, according to data compiled by Bloomberg. That’s down from No 1 back in 2014 when it handled 9% of them. The trajectory is similar in terms of fees.

Some of the junk deals Deutsche Bank underwrote are now coming back to bite. Within its blockbuster earnings report on Thursday were also declines in leveraged-finance revenue, as well as losses due to writedowns on debt it was unable to sell to investors.

“It was a weaker debt capital markets quarter and an even weaker leveraged-debt capital markets quarter,” Chief Financial Officer James von Moltke said on earnings call with analysts.

Deutsche Bank has been revising its strategy as a result, particularly when it comes to risky deals, he said.

The bank does not detail results to that level of specificity, but data compiled by Bloomberg for the first six months of 2025 estimates that revenue slumped 35% to €74mn ($86mn) in Europe, and fell 27% to $145mn in the US.

Its mark-downs were smaller in the second quarter than in the first, von Moltke said. Deutsche Bank flagged a €90mn hit in that period, citing an undisclosed transaction.

Deutsche Bank was known as a heavy hitter in leveraged finance for decades until about five years ago. Its decline in rankings and stature stems from multiple factors, including Sewing’s strategic cutbacks, a regulatory crackdown and shifting market dynamics that have changed the nature of the business.

A dearth of buyouts means there are fewer deals with juicy fees that Deutsche Bank would like to focus on. The bulk of activity coming through these days simply recycles old paper through repricings or refinancings, which management has less interest in pursuing. There is also fierce competition from private lenders that did not really exist during its heyday.

A series of high-profile departures has left an impression across the industry that Deutsche Bank is not the levfin behemoth it used to be.

Some notable exits include Ludovic Ingelaere, who went to Citigroup Inc after 25 years at Deutsche Bank; Daniel Stevenson, a managing director in leveraged-debt capital markets who left for private credit firm Hayfin Capital Management; Alexandra Barth and Celine Catherin, senior bankers who both went to Wells Fargo & Co.; and Anastasia Chernetskaya, who departed for Barclays Plc. There were also multiple decampments from sales and trading, including Brad Dunkin, who was Deutsche Bank’s US head of distressed sales and left for Morgan Stanley, and Greg Driscoll, the bank’s former head of high-yield sales, who split in December. Bloomberg has reported all those departures except for Driscoll, who announced it on his LinkedIn page.

Deutsche Bank has been trying to refill some of those seats, according to people familiar with its plans. Earlier this year, it nabbed Peter Yune, a high-yield trader who came from Bank of America Corp and Jackson Merchant is rejoining the German lender from Mizuho Financial Group Inc, where he was head of leveraged-loan capital markets.

“When you look at Deutsche Bank as an institution, they’ve had a world-class leveraged-finance business for over 20 years,” Michael Nelson, a recruiter who heads up the US markets business at Sheffield Haworth Ltd, told Bloomberg News. “However, in recent years, they’ve experienced some trading departures in high yield. They are actively working to solve those challenges.”

Apollo’s gaming deal was not the only problematic junk-debt package Deutsche Bank orchestrated over the past several months — known as “hairy” deals in industry parlance.

Market participants also point to casino operator Mohegan Tribal Gaming Authority’s $1.2bn high-yield bond that priced in March after having to revamp terms and structure, as well as two particularly challenging offerings last year: 1440 Foods and Oyo Hotels.

Deutsche Bank was eventually able to sell the $732mn term loan for 1440 Foods, which was related to the acquisition of protein-bar brand FitCrunch, after a group of lenders it led were briefly stuck holding it. With Oyo, a Singaporean booking company that sought $830mn to help purchase Motel 6, investors finally came around after several fits and starts.

Of course, other deals Deutsche Bank managed have gone off without a hitch. Loans this year for fire-prevention equipment maker Minimax Viking, subscription television provider Sunrise Financing Partnership and medical device-maker WS Audiology — each over $1bn — all priced easily and quickly.

Deutsche Bank’s CFO said that while the bank has, of late, been investing more in areas like equity capital markets and high-grade debt, leveraged-debt capital markets (LDCM) remains important.

“Speaking to the broader LDCM franchise, we’re really good at that business, and so it is strategic for us,” von Moltke said. “It’s one of our strengths in the origination & advisory franchise.”