LONDON (Dow Jones) - Credit Suisse Group rounded out the sterling third- quarter performance of European investment banks by reporting a 42% increase in third-quarter net profit Wednesday, on rising inflows from wealthy clients and growth in equity trading revenue.

Credit Suisse (CSR) said profit in the quarter increased to SFr1.92 billion ( $ 1.5 billion ), with its institutional securities division swinging to a SFr612 million profit and the bank pulling in SFr19 billion in net new assets.

The profit came in ahead of AFX News-compiled broker forecasts that ranged from SFr1.45 billion to SFr1.66 billion, joining European banking rivals UBS ( UBS), Deutsche Bank (DB) and ABN Amro (ABN) in bettering consensus forecasts.

Analyst Jon Peace of Fox-Pitt and Kelton pointed to equities trading and a 9.5% rise in net new money as driving the outperformance.

Investors, however, continued to prefer UBS over Credit Suisse. Credit Suisse shares were recently down 0.3% in Zurich, while UBS rose 2%.

Credit Suisse also underperformed UBS on Tuesday, when the larger Swiss bank reported a 71% profit rise.

In institutional securities, a 78% increase in equity trading income, a 30% rise in investment banking income and a 31% increase in fixed-income trading income lifted results.

Investment banking was lifted by an increase in equity underwriting and advisory fees, equity trading was helped by improved conditions in European and Asian convertibles as well as increasing cash business revenue, and fixed-income trading was boosted by improved results for interest-rate products, leveraged finance and residential structured portfolios.

The year-ago quarter also was a burdened by SFr624 million in litigation reserves.

Of the SF19 billion in net inflows, which was up SFr2.8 billion from the second quarter, SFr14.3 billion came from its private banking division.

Credit Suisse attributed the increase to strategy markets in Asia and onshore Europe .

Its wealth and asset management division saw inflows of SFr4 billion, on new clients accounts in private client services as well growth in Europe for Credit Suisse Asset Management.

Like UBS, Credit Suisse didn't provide a detailed outlook.

It expects higher interest rates and market volatility, a robust global economy, and oil and other commodities to see a correction within a longer-term uptrend.

(END) Dow Jones Newswires

11-02-05 0508ET Copyright (c) 2005 Dow Jones & Company, Inc. Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.