Mired in the funk that has currently enveloped the major global investment banks, strong results from Germany's Deutsche Bank (NYSE:DB) were unable to do much for the stock earlier this week. For the quarter, revenue climbed 27% versus the same quarter of 2006 and pretax income rose 32%. Pretax return on average active equity was 36% for the quarter, three percentage points higher than last year.

Deutsche's results were strong across the board. The bank's largest group, the Corporate and Investment Bank Group, provided 6 billion euro of the total 8.8 billion euro for the quarter -- a 29% gain versus 2006. Equity sales and trading posted an impressive 89% jump in revenue, thanks to increases in customer activity in derivatives, prime services, and cash equities. The bank's proprietary equity trading desk also helped results by delivering "substantially positive" net revenue versus a loss in the second quarter of 2006.

M&A advisory was also a particularly strong point. The bank was obviously able to capitalize on the strong M&A market, which helped revenue rise 63%. Equity and debt origination also posted notably higher revenue.

The interesting story in Deutsche's results, though, comes from the subprime mortgage market. While investors in other investment banks such as Goldman Sachs (NYSE:GS) and Bear Stearns (NYSE:BSC) are trying to figure out how much they could potentially lose from subprime exposure, Deutsche investors are wondering how much the bank might ultimately make from correctly playing the subprime fallout.

It's Deutsche analyst Eugene Xu to whom investors should be addressing the thank-you notes and boxes of chocolate. Two years ago he made a very prescient call when he predicted that there would probably be losses ahead for subprime loans in the U.S. The forecast allowed the bank to pursue a strategy that let them profit while others struggled.

Unfortunately, correct call or not, if the struggles of the credit market create turmoil and hurt business confidence, it will likely cramp Deutsche's business the same way it will cramp the rest of the i-banks.

For now, kudos are certainly in order for Deutsche's willingness to go against the crowd. But if Deutsche's stock is going to benefit from its subprime success and good-looking quarter, the market will have to decide that its overall prospects are better than the rest of the major investment banks.

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants ...