[ by Melanie Gretchen ] Deutsche Bank apparently is punishing the investment banking division for its large drop in profits.  taking its drop in profits out on jobs in its investment banking division.  Interestingly enough, Germany's largest lender reported on Tuesday that the unit, which had been the most profitable unit until recently, experienced a 63% decline in pretax profit, to €357 million - which caused overall bank Q2 earnings to fall by 46% to 661 million euros, or $811 million. New Co-CEO Cuts Jobs From His Former Command. Deutsche Bank Co-CEO Anshu Jain ran the investment banking unit prior to being promoted to his current position.  That said, it must have been hard for him to decide to cut 1500 jobs from that division.  An additional 400 job cuts will be spread throughout the rest of the bank.  Only one or two months ago, Deutsche Bank reported that it expected to cut 1,000 jobs from investment banking.  However, Q2 numbers came in lower than had been expected - do to very weak market conditions in Europe and throughout the global markets. And then there are the numerous regulatory investigations in the U.S. and the U.K. that will touch most if not all of the large global banks. Finally, Deutsche Bank is reviewing its compensation practices and its internal code of conduct "as part of a range of measures to bring about a cultural change."

"We are firmly convinced that the industry must change its compensation model, and we are determined to be in the forefront." -- Mr. Jain, who shares chief executive duties with Jürgen Fitschen, during a conference call with analysts.

Not An Isolated Issue. In other parts of the bank, pretax profit at Deutsche Bank’s retail banking operations, including its network of branches in Germany, dropped 13% to €398 million.  Due to a decline in the euro compared to the dollar – which led to an increase in operating expenses that also hurt profit – bank revenue fell 6% to €8 billion.

"The European sovereign debt crisis continues to weigh on investor confidence and client activity across the bank." -- Mr. Jain and Mr. Fitschen, in a statement.

For further details, go to [Dealbook, 7/31/12].