UPDATE 4-Deutsche Bank Q3 profit eclipsed by U.S. rivals

* Q3 net profit around 1.4 bln eur vs 755 mln poll average

* Pretax profit seen 1.3 bln eur vs 1.2 bln in analyst poll

* Bank releases Q3 results more than 1 week early

* Some analysts still see risk of capital increase

* Shares fall as much as 5 pct, lag market

(Adds background on CEO Josef Ackermann, updates shares)

By Jonathan Gould and Edward Taylor

FRANKFURT, Oct 21 (Reuters) - A sharp rise in earnings at Deutsche Bank AG (DBKGn.DE), Germany's biggest lender, failed to meet inflated expectations following stellar figures from Wall Street rivals, sending its shares down 5 percent.

"I suspect that the market had secretly anticipated even better figures," Hamburger Sparkasse analyst Christian Hamann said. "JP Morgan and Goldman Sachs figures could have led some to expect that."

Deutsche Bank, Europe's 11th-biggest lender, released third-quarter headline earnings on Wednesday more than a week early that beat analysts' expectations, although net profit got a one-off boost from tax rebates.

Analysts said the bank's shares were also hit by lingering concerns about the possible need for a capital hike.

"The results are solid. But it's not a blow-out either. Results at investment banking were probably not as robust as U.S. peers', with all due caution as we don't know much detail yet," said Stefan Stalmann, analyst at UniCredit.

While Deutsche Bank said its Tier 1 regulatory capital -- a key measure of financial strength -- rose to 11.7 percent at the end of September from 11.0 percent at the end of June, analysts said a move to raise more capital may still be on the cards.

"We wouldn't completely rule out a small capital increase to support the growth strategy but we assess the near-term probability below 50 percent," said DZ analyst Matthias Duerr in a note to clients.

Deutsche Bank has already taken a stake in Deutsche Postbank AG (DPBGn.DE) and may raise it further. It is also closing in on wealth management operations at private bank Sal. Oppenheim and is expected to buy assets of Dutch bank ABN AMRO. [ID:nLK323528]

TOUGH ACT TO FOLLOW

Deutsche Bank said it expected all business segments would report positive results when it releases detailed figures on Oct. 29, indicating that the asset management division could post its first profit since the second quarter of 2008.

The bank provided no details on earnings at its investment banking operations, traditionally responsible for the lion's share of profits.

The quality of the results will also be a test of Josef Ackermann's stewardship through the crisis. The 61-year-old Swiss chief executive was dissuaded this year from retiring as the bank wanted to avoid a prolonged leadership struggle amid few obvious successors. [ID:nLR758221]

Instead of stepping down in May 2010 as planned, he agreed to stay on until 2013. By contrast other bank CEOs including Richard Fuld at Lehman Brothers, Stan O'Neal at Merrill Lynch and Fred Goodwin at Royal Bank of Scotland (RBS.L) have been ousted.

Bank of America (BAC.N) chief Ken Lewis has agreed to step down after drawing fire for decisions he made during the crisis.

Deutsche Bank said it expected net profit of around 1.4 billion euros ($2.1 billion) in the third quarter and pretax profit of around 1.3 billion.

The preliminary result was well above the Thomson Reuters I/B/E/S estimate for net income of around 755 million euros, while pretax profit had been seen at just under 1.2 billion.

Equinet analyst Philipp Haessler said the above-expected results were a positive development but added he was sticking to a "reduce" recommendation on the shares.

"We continue to see high risks for a capital increase and declining earnings in the coming quarters due to a normalisation of the capital market environment," Haessler said.

Deutsche Bank's shares, which had risen more than 15 percent over the past two months, fell as low as 52.56 euros and were trading down 3.2 percent at 53.61 euros by 1431 GMT, making them the second-biggest decliners among German blue chips .GDAXI and lagging a 0.1 percent gain in the DJ Stoxx index of European banking shares .SX7P.

According to StarMine, which weights analysts' forecasts according to their track record, Deutsche Bank trades at nine times 12-month forward earnings, a discount to continental Europe rivals such as BNP Paribas (BNPP.PA) on a multiple of 11.2, as well as to Credit Suisse Group AG (CSGN.VX) and UBS AG (UBSN.VX) on multiples of 10.2 and 16.5 respectively. (Additional reporting by Ludwig Burger and Eva Kuehnen; Editing by David Holmes) ($1=.6678 Euro)