Credit Suisse reported a 24% drop in 2010 annual income, adding that the ‘‘new reality’’ in bank regulation - including tougher capital rules - will cut into 2011 profits.

After "significant progress in defining the new regulatory environment" in 2010, the new [lower profit] targets "represent a prudent expectation of what our business can generate over the long term."

CEO Brady Dougan was upbeat about the bank's 15% target for 2011 profits - reduced from 18% - calling the forecast "reliable, reasonable," and one "that we can exceed over time."  Credit Suisse, which avoided a government bailout during the financial crisis, said it had attracted net new assets of $57 billion last year.

Responding to the still-contentious issue of bank pay, Mr. Dougan said CS's total compensation per head in 2010 was down about 9% from the 2009 level, while the bonus pool fell 25%.  Under Mr. Dougan, the first American to run Credit Suisse, the bank has been gaining on crosstown rival UBS AG in the business of managing assets for wealthy clients.

However, the cost of attracting additional funds can be high, and Credit Suisse hasn't shied away from hiring well-paid employees.  Mr. Dougan defended this aggressive hiring, saying the investments had left Credit Suisse’s private banking business "very well positioned for a recovery in client activity levels."  Asked about whether CS might face the kind of legal troubles from which UBS has just emerged, Mr. Dougan said he hoped that was not the case.     [Bloomberg, 2/10]