FRANKFURT (Reuters) -Deutsche Bank (DB, DBK.DE) bounced back to profit in the third quarter, as it reduced reserves set aside for investor lawsuits over its Postbank division while its global investment bank fired on all cylinders.

A 15-quarter profit streak at Germany's largest lender was interrupted in the second quarter after it made a large provision for the lawsuits. But Deutsche has since settled some of the suits and cut provisions by 440 million euros ($475 million), helping lift profit.

The bank also said it was applying for a share buyback, a move that was on hold because of its issues with Postbank, though provisions for credit losses were double those a year earlier.

Shares of Deutsche Bank fell over 3% in the US and Germany early Wednesday after the quarterly report.

Net profit attributable to shareholders came in at 1.461 billion euros in the quarter, 42% more than a year earlier and in line with expectations. It logged a loss of 143 million euros in the second quarter.

"In these three months, we made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business," Deutsche Bank CEO Christian Sewing said.

The investor lawsuits - which have been bouncing around courts for years, weighing on Deutsche's share price - claim that the bank underpaid in its acquisition of Postbank.

The purchase of the no-frills lender with its millions of clients and roots in the country's postal system began during the global financial crisis and had been aimed at broadening Deutsche's reach in Germany while gaining a steady income stream.

Deutsche said in April that although it strongly disputed the claims, it had decided to post a provision for the cases of 1.3 billion euros.

While some of those lawsuits have been settled, others remain and a court hearing in one matter is scheduled for later on Wednesday in Cologne.

Deutsche's biggest breadwinner in the quarter was its sprawling investment bank, which operates from Sydney to New York. Revenues rose 11% from a year earlier, above expectations for gains of 6.5% and mirroring gains at rivals like JPMorgan and Goldman Sachs.

But revenues at Deutsche's other two big divisions were lacklustre.

Revenue at the retail division, which includes Postbank, was flat, in line with expectations. The corporate bank saw a 3% decline in revenue, while analysts had expected a gain of less than 1%.

Both divisions had been lifted in recent quarters by the income generated by higher interest rates, gains that will ease as the European Central Bank cuts interest rates.