* Q1 net profit seen sliding 21 percent to 1.742 bln Sfr
* Q1 wealth management net new money seen at 7.9 bln Sfr
* Due to report Q1 earnings at 0445 GMT
By Emma Thomasson
ZURICH, April 26 (Reuters) - UBS is set to report on Tuesday it attracted the most client money for its wealth management arm since the financial crisis began, but its investment bank might still disappoint.
Switzerland's biggest bank should see inflows of 3.9 billion Swiss francs ($4.39 billion) at its core wealth management unit in the quarter after they were flat the previous three months and following continued big outflows in the first half of 2010.
Clients pulled nearly 400 billion francs from the world's second-largest wealth manager in recent years after UBS was bailed out following huge writedowns on toxic assets and was hit by U.S. charges that it helped wealthy Americans dodge tax.
The Americas business is expected to attract around 4 billion francs of new money, up from 3.4 billion francs in the previous quarter, as it rebuilds client trust after the tax dispute forced it to hand account data to U.S. authorities.
The bank has also been winning client cash in Asia and among the ultra wealthy and Swiss customers, but has continued to bleed assets in Europe, where neighbouring countries have chased tax evaders hiding behind Swiss bank secrecy.
Meanwhile, UBS faces increasing scrutiny of its investment bank turnaround plan after an exodus of top bankers and an admission by Chief Executive Oswald Gruebel he underestimated the challenge of reviving fixed income.
European investment bank income in the first quarter is set to rebound from a grim six months, although a trading slump sparked by the market turmoil in March will keep it far below the stellar start seen last year.
Revenues in fixed income, currencies and commodities (FICC) -- which accounts for over half investment banking income among top tier players -- could decline by 5 percent in Europe in 2011, Morgan Stanley analysts predicted.
"We believe therestructuring is proceeding more slowly than previously expected leading to slower growth in FICC trading revenues and expect UBS has squeezed the cost base in order to improve its cost income ratio," Vontobel analysts said.
At U.S. rival Morgan Stanley investment banking was the biggest reason for a steep earnings decline in the first quarter, with fixed-income trading the main source of that drop.
UBS said in February it expected client inflows to strengthen "noticeably" in 2011, but cautioned it did not expect the investment bank to match a seasonally strong fourth-quarter result even though it expects some improvement in trading.
Some analysts have said Gruebel will have to revise his target for a pretax profit of 15 billion Swiss francs from 2012, but he said last month he would only review the figures once there was more clarity on new capital rules.
Gruebel has said stiff Swiss standards -- which the government sent to parliament last week and could be approved this year -- could force UBS to move units abroad.
UBS is not paying a dividend for 2010 or for some time to come as it retains earnings to meet the tough new requirements.
UBS was forced to cut risky but potentially very profitable proprietary trading in favour of client flow business after it took huge losses in the financial crisis, pushing it to take a bailout from the Swiss government in 2008. ($1=.8876 Swiss Franc) (Editing by Jon Loades-Carter)