Insurance settlements at Credit Suisse cut the firm's net income at its private banking arm, but net assets grew strongly.

Income before tax at the private banking arm of Credit Suisse fell by 8 per cent year-on-year to SFr892 million (around $833 million) in the first three months of 2010, hit by the impact of captive insurance settlements, the Zurich-listed banking group said, while net revenues rose by 1 per cent to SFr2.9 billion.

Total operating expenses rose 8 per cent compared to the first quarter of 2009, which included captive insurance settlement proceeds of SFr100 million.

Credit Suisse said that when captive insurance settlements are stripped from the figures, income at the private bank held flat.

Private banking recorded SFr18.6 billion of net new assets in the first quarter, with “very strong inflows from Swiss and emerging markets clients in particular”.

In recent quarters, Credit Suisse’s results have compared relatively favourably with that of its Swiss rival, UBS, as the latter had continued to see outflows from its wealth management arm.

The Wealth Management Clients business, one of the private banking segments, reported income before taxes of SFr677 million, down by down 6 per cent compared to the same period a year ago, as a 4 per cent rise in net revenues to SFr2.464 billion – reflecting higher recurring and transaction-based revenues – was more than offset by an 8 per cent rise in total operating expenses.

The gross margin on assets under management was 121 basis points, a decrease of 13 basis points compared to the first quarter of 2009, as average assets under management increased 14.8 per cent and net revenues increased by 4 per cent.

For the entire Credit Suisse group, it reported net income attributable to shareholders of SFr2.1 billion in the first quarter, up by 2 per cent on the same period last year.

The group's Tier 1 capital ratio stood at 16.4 per cent at the end of the first quarter.