FRANKFURT (Reuters) - Deutsche Bank DBKGn.DE is preparing to unveil a sweeping, multi-billion euro overhaul within days that would see the axe fall heaviest on investment bankers, sources familiar with the matter said on Wednesday.

FILE PHOTO: People are silhouetted next to the Deutsche Bank's logo prior to the bank's annual meeting in Frankfurt, Germany, May 24, 2018. REUTERS/Kai Pfaffenbach/File Photo

The revamp is expected to cost the bank up to 5 billion euros ($5.6 billion), one of the sources said.

Chief Executive Officer Christian Sewing flagged an extensive restructuring in May when he promised shareholders "tough cutbacks" to the investment bank. The pledge came after Deutsche failed to agree a merger with rival Commerzbank CBKG.DE.

The lender, Germany’s largest, is planning on cutting between 15,000 and 20,000 jobs, or more than one in five of its 91,500 employees.

The bulk of the job cuts will take place outside Germany, said a person with knowledge of the plans, as they are mostly targeting the investment bank, a unit that has struggled to generate sustainable profits since the 2008 financial crisis.

The overhaul signals that Deutsche is coming to terms with its failure to keep pace with Wall Street's big hitters such as JP Morgan Chase & Co JPM.N and Goldman Sachs GS.N.

“Sewing really wants to move the needle,” said another person familiar with the plans.

The price tag for restructuring raises the probability that the lender will report a loss for the full year, the person said, meaning Deutsche will have been in the red for four out of the five last years.

But executives and investors hope the overhaul, however costly, will be radical enough to turn around the bank’s fortunes after its shares fell to a record low last month.

Deutsche declined to comment on the restructuring costs or the effect on its earnings. The bank said it was working on measures to accelerate its transformation so as to improve its sustainable profitability.

“We will update all stakeholders if and when required,” it said. The bank’s supervisory board is due to meet on Sunday to discuss the overhaul, people familiar with the matter said.

ACHILLES HEEL

Other measures under consideration include a reduction in the size of the bank’s nine-member management board, as well as the creation of a so-called bad bank to hold tens of billions of euros of non-core assets.

Founded in 1870, Deutsche has long been a default source of lending and advice for German companies seeking to expand abroad or raise money through the bond or equity markets, a role which had the tacit backing of successive governments in Berlin.

Big cuts to its investment bank could make it harder for the lender to fulfill this role and would mark a reversal of a decades-long expansion that began with the purchase of Morgan Grenfell in London in 1989 and continued a decade later by taking over Bankers Trust in New York.

The investment bank generates about half of Deutsche Bank’s revenue but is also considered its Achilles heel.

Revenue at the division is forecast to fall to 12.4 billion euros this year, according to a consensus of analysts. That would mark a fourth consecutive year of decline, down more than 30% from 2015.

In a shift that underscores its waning relevance within Deutsche, the investment bank would be represented on the board by Sewing rather than having a seat at the table, as is currently the case, according to people familiar with the plans.

To help finance its overhaul, Deutsche is seeking to lower the amount of capital that regulators require it to have on hand, according to three people with knowledge of the matter.

The bank is aiming for a so-called common equity tier 1 capital ratio of 12.5%, two of the people said, confirming a figure first reported by the Financial Times. The paper said that would free up 3.5 billion euros in capital.