At one level, the problem Deutsche Bank faces is that a legacy of past mistakes and illegal operations, especially by its investment banking arm, have in recent years caused billions in fines, restructuring charges, and net losses.

Under outgoing CEO John Cryan, Germany's largest private bank — the 16th largest bank in the world by total assets, as of June 2017 — took significant steps to resolve these legacy problems. But Cryan was forced out by Paul Achleitner, chairman of Deutsche's supervisory board, for failing to execute the restructuring strategy with sufficient vigor.

Now, Christian Sewing , who was appointed the new CEO "effective immediately" by the supervisory board on Sunday evening, has sent a memo to the bank's employees that indicates he intends to be more rigorous on cost-cutting. He warned them to expect "tough decisions" from him. He also announced that he wanted the bank to become more aggressive in pursuit of financial targets on the revenue side, urging staff to adopt a "hunter's mentality."

Sewing is a Deutsche Bank lifer, who started as a trainee when he was a teenager — he is now 47 — and stayed, except for a two-year stint at mortgage lender DGH from 2005 to 2007.

"Now someone has been raised to the top of the largest German bank who has worked there almost all his life. This inspires confidence among shareholders that the right steps are now being taken to make the turnaround," said Jochen Stanzl, a market analyst at CMC Markets in Frankfurt.

But while some management tweaks may help improve Deutsche's bottom line to some extent in the next couple of years, there is a much deeper problem that no-one appears to have any idea how to resolve: The problem of how to generate robust year-on-year growth in revenues and profits for a large bank in the context of a bank-choked world in which economic activity is growing only very modestly.

The eternal search for perpetual growth

Given the slow pace of economic growth in its heavily overbanked European home market, it isn't clear where Deutsche Bank can turn to increase its revenues and improve its margins. Swapping out the leadership team doesn't change that reality.

Germany, like much of Europe, is saturated with private and public banks. In total, some 1,900 banking companies are in operation in Germany now. Twenty years ago, there were 3,600. The annual decline in their number has been hovering around 4 percent for years, and more shrinkage is expected.

In addition to major private banks like Deutsche and Commerzbank, there exists a plethora of regional Landesbanken, credit unions, cooperative banks, and savings banks.

Where to refocus efforts

Deutsche Bank is a "universal bank," which is to say, it offers loans and financial services across a full range of clients, from private individuals (retail banking and private banking) to major corporations (commercial banking and investment banking). It manages investments for wealthy private clients, and also engages in financial trading on its own account.

Where will it refocus its efforts under the new CEO? Could the bank grow by lending more to German business?

Probably not. A crucial role in financing the German economy is filled by the Sparkassen, regional savings banks owned by city or regional governments, mandated to support local economic development. The Sparkassen are the main financing pillar supporting Germany's thousands of medium-sized specialist technical companies, the Mittelstand, which form the backbone of the country's prosperity.

So if Deutsche wanted to grow its commercial banking arm by lending more to the Mittelstand, then — if successful — it would merely be taking some business away from the Sparkassen and other banks. A lack of financing options isn't generally a problem for Mittelstand firms, so a big increase in the volume of total lending to them is implausible.

Similarly, if Deutsche wanted to get more heavily into retail or commercial mortgage lending, it would likewise face stiff competition, as well as increase its exposure to a sector that occasionally sees spectactular downturns when mortgage bubbles pop — as they did in the US, Spain and Ireland in 2008.

As for investment banking, it is an intensely competitive global business, and Deutsche Bank has not demonstrated great success at it on a net basis since it dove headfirst into the shark pool with its acquisition of the London-based investment bank Morgan Grenfell in 1990. It isn't yet clear whether Christian Sewing intends to shrink or expand Deutsche's investment banking.

Retail banking or investment banking?

Sascha Steffen, a finance professor at the Frankfurt School of Finance, told DW that he expects a gradual shift toward a stronger emphasis on retail banking under Christian Sewing's leadership. Sewing's experience was in private and commercial banking, risk management and auditing.

Steffen said he didn't expect Sewing to lead Deutsche Bank in the direction of doubling down on investment banking, because "for each euro earned [in investment banking], one euro has to be spent, so this seems to be quite unprofitable."

Steffen added that he saw Deutsche Bank as "vulnerable," because it has a relatively thin capital buffer — which means that it could be too vulnerable to insolvency if a financial crisis were to tank part of its loan book. To correct that, it needs to thicken its capital cushion by selling new shares, but before doing that, the bank "needs to return to profitability and improve its performance," so that it can raise its share price and avoid unnecessarily diluting the existing, already issued stock.

The bank would not want to issue new shares now because its share price is currently weak, having declined by more than half since John Cryan took over in July 2015, and by more than 70 percent since its five-year peak in December 2014.