Banking duo sing from same hymn sheet Barclays" Antony Jenkins (left) and Deutsche's Anshu Jain must transform the culture at their banks Anyone who listened to both Barclays" and Deutsche's analyst calls on Tuesday may have thought that there was a strange echo on the phone lines into London and Frankfurt. The bank's two bosses seemed to be using the same management buzzwords: it was all about "costs," "capital" and, above all, "leverage." It was, perhaps, to be expected. This week, it became more apparent then ever that Antony Jenkins, Barclays" chief executive, and Anshu Jain, Deutsche's co-head, face similar uphill-struggles - around a year after taking the helm at their respective banks. These two "AJs" have been working to clean up the many legacy issues left behind by their predecessors: from insufficient capital, to legal scandals, and strategic deficiencies. And this week, they both moved to address what has been one of the most pressing problems for both of their banks: a high debt load in relation to overall assets. But while the challenges facing Barclays and Deutsche are similar, the routes they have taken to address them have been notably different. Barclays" plan - unveiled on Tuesday along with its first-half results - is centred around a larger than expected £5.8bn rights issue, supported by moves to shrink its balance sheet by a moderate 5 per cent and issue £2bn of contingent convertible debt. Deutsche, on the other hand, has opted for a far more aggressive asset reduction plan. Mr Jain said the bank would reduce its balance sheet by up to €300bn in the next two years - stripping out a fifth of its total asset base - after launching a smaller €2.95bn equity raising in April. These different approaches are largely due to timing. The UK regulator recently imposed a much tougher timetable for Britain's banks to meet a new leverage ratio requirement, leaving Barclays less than 12 months to boost its equity to a level equal to 3 per cent of its overall assets. Initially, the bank had been expecting to hit the 3 per cent leverage ratio in 2015 - a deadline that Mr Jenkins believes he could have met without having to raise equity. However, in recent weeks, Barclays was told by the Prudential Regulation Authority that the deadline would be brought forward to June 2014 - leaving it little option but to raise fresh funds, and fast. At the same time, a recalculation of the PRA's leverage ratio, using new European definitions of capital, left Barclays in a weaker position than it appeared just a few weeks ago. Under the new measure, its stressed leverage ratio dropped to 2.2 per cent at the end of June, compared with the 2.5 per cent number reported by the PRA last month on the basis of older figures. Under the PRA's new leverage criteria, Barclays said it was facing a capital shortfall of £12.8bn - much larger than the £7bn analysts had expected. Mr Jenkins, who irked the regulator last month when he warned that forcing the bank to meet an accelerated leverage ratio deadline could restrain lending, on Tuesday stressed the "constructive" nature of its discussions with the PRA. He highlighted the benefits for investors, saying that the capital raising - together with a newly conservative position on provisioning for mis-sold loan insurance and interest rate swaps - brought much needed certainty on capital and conduct risk. "The question mark in the minds of investors has been around capital and conduct costs - these actions are designed to reduce that uncertainty," he argued. The new chief executive could not, however, gloss over the fact that the tougher capital demands meant he would have to delay by a year a key pledge to drive up returns to above the bank's cost of capital - about 11.5 per cent - just five months after he had set the target. Analysts at Citibank said that "simply applying the mechanics of the rights issue would result in a decline in our 2015 return on tangible equity forecast from 13 per cent to 11.3 per cent." They noted that this was "in line with Barclays" expectation for return on equity to now exceed cost of equity by 2016, instead of the original 2015 target." For Deutsche, its balance sheet shrinkage plan will cost €600m in one-off expenses in the next 18 months and will chip €300m off its future earnings before interest and tax from 2015, according to Stefan Krause, its chief financial officer. It is the final part of Mr Jain's plan to address a particularly weak capital position. When he took office a year ago, Deutsche was lagging behind its global rivals with a core tier one level of merely 5.9 per cent. Within 12 months, however, a combination of changes in its risk models, retained earnings and a €2.95bn capital raising exercise in April had catapulted Deutsche from a laggard to one of the world's strongest capitalised banks. Its core tier one ratio, now 10 per cent, already matches its 2015 target. Its actions, combined with the balance sheet shrinkage, will help lift Deutsche's leverage ratio to 3.6 per cent by 2015 under the European version of the incoming Basel III rule book. Mr Jain and Mr Jenkins clearly believe there are different ways to improve low leverage ratios. But, the outcomes - like their conference call utterances - have resonated in a similar way with shareholders: Barclays" shares fell by 6 per cent to 290.6p on Tuesday, while Deutsche's dropped more than 4 per cent to €34.4.