Pre-tax income at the private banking arm of Credit Suisse was SFr857 million (around $805 million) in the fourth quarter of last year, surging by 66 per cent from the same period a year before, but was down 1 per cent on the previous three-month period of 2009, the bank said today.

The private banking unit, which comprises the Wealth Management Clients and Corporate & Institutional Clients businesses at the Zurich-listed bank, said net revenues were SFr3.0 billion, a fall of 4 per cent on the same period a year ago.

Credit Suisse, while it has not been unscathed by the financial turbulence of recent months, has been able to ride out the storms in better shape than its Swiss rival, UBS.

“In a market that is undergoing significant structural changes, our private banking business has outperformed,” said Brady Dougan, chief executive.

He said that net inflows in this segment “were strong across most businesses” and amounted to SFr12.0 billion excluding net client outflows of SFr5.6 billion relating to a tax amnesty in Italy. There were net new assets of SFr6.4 billion in private banking in the fourth quarter.

In Credit Suisse’s wealth management clients business, it achieved a gross margin of 130 basis points in the fourth quarter.

“Wealth management remains a very attractive growth market. Having invested in our private banking business throughout the financial crisis, we now have the operating leverage to further improve our profitability when markets and the demand for comprehensive solutions recover. Furthermore, our international presence and our integrated business model put us in a very good position to grow our business and to gain further market share,” said Mr Dougan.

For the group as a whole, Credit Suisse said net income attributable to shareholders was SFr793 million in the fourth quarter, unchanged year-on-year but down by 66 per cent on the previous quarter. For the whole of 2009, net income was SFr7.62 billion, flat compared with 2008, the bank’s statement said.

Mr Dougan also reiterated the changes that Credit Suisse is making to its executive remuneration, responding to a need to align pay more closely with the interests of the bank and its clients – confirming reports by WealthBriefing earlier this year of a change.

“We have been using deferred, share-based compensation instruments for many years and in 2009 we were the first institution to announce the adoption of the guidelines for best practice that followed the G-20 summit. In line with this approach, members of the executive board at 31 December, 2009 received no variable cash compensation for 2009 and all variable compensation they received for 2009 was in the form of deferred awards and subject to performance criteria, which may result in future negative adjustments,” he said.

Total variable compensation for 2009 fell by 21 per cent compared to 2007 and average variable compensation was SFr144,000, down from SFr180,000 for 2007.

Of the total variable compensation awarded across Credit Suisse for 2009, 40 per cent was in the form of deferred awards and subject to performance criteria, which may result in future negative adjustments, Mr Dougan said.

In other details, pre-tax income at Credit Suisse’s investment banking arm in the fourth quarter was SFr1.0 billion, a fall of 41 per cent, year-on-year. At asset management, pre-tax income was SFr159 million, down by 49 per cent. Credit Suisse Group’s total assets under management from continuing operations were SFr1.229 trillion at the end of 4Q09, up by SFr3.7 billion or 0.3 per cent from the end of September last year.

At the end of December, the group had a Tier 1 capital ratio of 16.3 per cent, little changed from the end of September 2009.