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It takes a lot to rattle Wall Street.

But Deutsche Bank managed to. The beleaguered German giant announced on July 7 that it is laying off 18,000 employees—roughly one-fifth of its global workforce—and pursuing a vast restructuring plan that most notably includes shutting down its global equities trading business.

Though Deutsche’s Bloody Sunday seemed to come out of the blue, it’s actually the culmination of a years-long—some would say decades-long—descent into unprofitability and scandal for the bank, which in the early 1990s set out to make itself into a universal banking powerhouse to rival the behemoths of Wall Street. That pivot represented a major shift for the financial institution, which had contributed to Germany’s post-World War II economic “miracle” as a domestically-focused commercial lender and retail bank.

Yet Deutsche eventually set its sights on a more glamorous niche, venturing into the high-risk, high-reward realm of stocks, bonds and derivatives trading via acquisitions that sought to expand its global operations. First came the 1989 acquisition of U.K.-based investment bank Morgan, Grenfell & Co., spearheaded by then-chairman Alfred Herrhausen. That was followed a decade later by the purchase of struggling Wall Street firm Bankers Trust during chairman Rolf-Ernst Breuer’s tenure.

Both moves saw Deutsche heighten its exposure to an altogether more aggressive brand of banking—a departure from its previous reputation as a conservative, Eurocentric, middle-market commercial lender. The Bankers Trust deal, in particular came amid a wave of consolidation within the financial services sector, and involved absorbing an institution that was plagued by fraud investigations.

The acquisitions “struck me as not being in the character of Deutsche Bank,” says Mayra Rodriguez Valladares, managing principal at capital markets consultancy MRV Associates. Valladares, who worked as an equity analyst at Bankers Trust around the time of the Deutsche Bank acquisition, described Bankers’ culture as one where “traders would have sold their grandmothers three times for a profit.”

“It was a very aggressive transaction, and the culture of Deutsche Bank has been so different since,” she says. Expansion brought with it “an increase in operational risk exposure,” as well as a deal-chasing culture in which “internal controls start to loosen” and bankers “cut corners in terms of their due diligence,” Valladares notes. (Deutsche Bank did not return a request for comment for this article.)

In its quest to compete with the likes of Goldman Sachs and Merrill Lynch, Deutsche “had to chase crappy business,” adds Christopher Whalen, a former Bear Stearns banker and chairman of financial services consultancy Whalen Global Advisors.

“The measure of any banker is the deals that they do, and they deals that they don’t do,” Whalen notes. “They were marginalized by the bigger houses that had better teams, better relationships, and access to customers and markets that Deutsche Bank just didn’t have.”

Symptomatic of such issues has been an endemic series of scandals that have rocked the bank in recent years.

There was the $7.2 billion settlement with the U.S. Department of Justice, in 2017, for its role in selling toxic mortgage-backed securities in the years leading up to the global financial crisis, as well as $2.5 billion in settlements with U.S. and U.K. authorities for a Libor manipulation scandal in the 2000s. There was a $258 million penalty in 2015 for violating U.S. sanctions on Iran, Libya, Syria and other nations, and an investigation into its foreign exchange trading practices that resulted in a $205 million settlement last year.

The bank has also been implicated in multiple high-profile money laundering scandals, including its role in laundering $10 billion out of Russia (for which it was fined $630 million by U.S. and U.K. regulators in 2017) as well as its alleged involvement in the $150 billion money laundering scandal that has plagued Denmark’s Danske Bank. Deutsche saw its German headquarters raided by authorities last year, in connection to the Panama Papers offshore money laundering revelations. And on Wednesday, the Wall Street Journal reported that U.S. authorities are now investigating the bank’s involvement in the 1MDB scandal—the alleged multibillion-dollar fraud of a Malaysian government-run fund that has already ensnared Goldman Sachs.

Deutsche’s relationship with President Donald Trump, meanwhile, found the bank drawn into Special Counsel Robert Mueller’s investigation of the Trump campaign’s ties to Russia, as well as congressional investigations into Trump’s finances. For some observers, the fact that Deutsche Bank allowed itself to become one of Trump’s largest creditors—lending him more than $2 billion, according to the New York Times, when most major banks would not in lieu of multiple corporate bankruptcies—exemplifies the bank’s fall from grace.

Deutsche’s myriad scandals, growing losses, and dwindling share price have now forced CEO Christian Sewing’s hand. Sewing, who replaced John Cryan in the role last year, may have inherited the institution’s considerable troubles, but he’s now charged with shepherding Deutsche through what’s sure to be a painful process over the next few years.

The bank expects to post a net loss of 2.8 billion euros ($3.1 billion) in its upcoming second quarter results, but that’s dwarfed by the 7.4 billion euros ($8.3 billion) it will spend on its restructuring costs between now and 2022. Those efforts include which include setting up a so-called “bad bank” unit, to sequester and wind down $74 billion euros ($83 billion) of risk-weighted assets that Deutsche is looking to get off of its books.

The question is what’s next for Deutsche, and whether it could involve some kind of a merger or acquisition. The bank’s reorganization plan comes in the wake of failed merger talks with fellow Frankfurt-based financial giant Commerzbank—a proposition that, given Commerzbank’s own troubles, Valladares compared to “two drunks propping each other up.”

As part of the restructuring, Deutsche announced a preliminary agreement with BNP Paribas that would have the Paris-based bank “provide continuity of service” to Deutsche’s equities clients. That arrangement has seen BNP floated as a possible buyer, according to Whalen.

Whalen points to Citigroup as another possible, arguably more logical suitor for Deutsche Bank. He describes both institutions as “offshore banks with relatively small onshore footprints”—but unlike Deutsche, the Wall Street giant has a robust consumer credit business that has “saved Citi many times” when the investment banking business has let it down.

“You can’t have a bank trading at this kind of a discount,” Whalen says of Deutsche’s share price, which closed recently at $7.28. “Someone needs to buy this—it’s almost stupid that it hasn’t happened by now.”

Whatever happens, one things for sure: when Deutsche Bank entered the glamorous world of investment banking, this wasn’t exactly the type of deal they expected to be chasing.

At Deutsche Bank, How Two Decades of Disarray Culminated in ‘Bloody Sunday’

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