(Bloomberg) -- Credit Suisse's wealth management business posted a 10% pre-tax profit of $666 million, or 636 million francs, in the first quarter, the bank said.

The increase beat analysts’ estimates as the ratio of costs to revenues declined, Switzerland’s second-biggest bank said this week. Net margin at the "wealth management clients" unit was 30 basis points, the highest since the second quarter of 2013.

Credit Suisse benefited from the same surge in trading that helped lift earnings at U.S. competitors, though higher costs at the investment bank eroded profit. The bank this week also reduced its cost-cutting target for this year, citing risk, compliance and regulatory charges.

The bank posted “better performance in wealth management both in terms of margins and costs as well as strength in trading,” said Jon Peace, a London-based analyst at Nomura Holdings. “Overall results are slightly mixed because of the backward evolution in capital.”

The bank also said a key measure of financial strength dropped in the first quarter, stoking concerns it may have to boost capital.

The ratio of capital to risk-weighted assets was at 10%, down from 10.1% at the end of 2014, the bank said. The firm targets 11%. Net income in the period rose 23% to $1.1 billion (1.05 billion Swiss francs) on increased trading activity.

Credit Suisse has been cutting assets at the investment bank, announcing fresh cuts in February, to improve buffers needed to withstand potential losses. Investors are betting CEO Brady Dougan’s successor, Tidjane Thiam, 52, will downsize the bank more decisively to focus on money-managing businesses when he takes over in June.

Capital, “already a concern for the market, went backwards in the quarter with further headwinds to come,” Omar Fall, an analyst at Jefferies Group in London, said in a note to clients. “The risk is that the debate around the incoming CEO shifts from the potential for strategic change to the risk of capital raising.”

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