* Investment bank revenues $5.4 bln vs $5 bln
* Investment bank revenues in Swiss francs slipped 6 percent
* CEO says banks should embrace capital rules after crisis
* Shares fall 0.9 percent after opening gains
(Adds share indication, CFO comment, details)
By Emma Thomasson
ZURICH, April 27 (Reuters) - Credit Suisse, reported record first-quarter investment banking revenue that beat forecasts as a hiring spree helped it gain market share and client activity rose.
Switzerland's second-largest bank said on Wednesday investment bank revenues rose to a record $5.4 billion from $5 billion a year ago, although in Swiss francs they slipped 6 percent to 4.9 billion francs ($5.57 billion) as the dollar fell.
"If you look at our U.S. peers, our numbers stand us in very good stead," chief financial officer David Mathers told journalists.
The first quarter is typically the strongest period for investment banking and can set the tone for the year, but U.S. bank results lagged well below the bumper levels of a year ago as activity was hampered by North African political turmoil, Japan's earthquake and economic wobbles in the eurozone.
Chief executive Brady Dougan said the results showed his investment in fixed income trading had begun to bear fruit.
"We have substantial momentum across all of our client-based businesses and we remain well prepared to continue to capitalize on our improved market position," he said.
"Our pipeline in underwriting and advisory remains strong and we are well positioned to capture increases in issuance levels and M&A activity."
Dougan's strategy to hire investment bankers aggressively early in 2010 had initially backfired as markets flattened.
"The results are slightly ahead of expectations," said Cheuvreux analyst Christian Stark. "The main strength is investment banking, which is about 8 percent ahead of expectations on a strong fixed income performance."
UBS ALSO HAD GOOD Q1
Swiss rival UBS said on Tuesday its struggling investment bank fared better than expected in the quarter, helping lift its shares over 5 percent and tugging Credit Suisse up 2 percent.
Credit Suisse shares opened 0.5 percent higher after the results but they were now down 1.5 percent at 0718 GMT. The shares had gained 2 percent on Tuesday following the strong UBS results.
British bank Barclays said on Wednesday top-line income at its key investment banking arm dipped to 3.3 billion pounds ($5.4 billion), from 3.8 billion a year ago to be just below expectations.
Credit Suisse's first-quarter net profit fell 45 percent as it took a big expected charge on its own debt after it issued so-called CoCo bonds. The bank said the strength of the franc had also hurt results.
Under strict new capital rules drawn up after the crisis, Switzerland has encouraged its two biggest banks to issue contingent convertible (CoCo) bonds which boost capital by converting into equity if a bank runs into trouble.
Credit Suisse issued its first CoCos in February in a positive sign for the nascent market for the bonds, which had initially received a cool reception.
Dougan said banks needed to embrace a stronger capital regime in response to the financial crisis and said Credit Suisse should be able to implement proposed tough Swiss capital rules without a big impact on its competitive position.
"We are encouraged that measures proposed by regulators outside of Switzerland suggest that progress toward a more level playing field is being made," he said.
His comments contrast with criticism of the Swiss rules by UBS CEO Oswald Gruebel. UBS said on Tuesday it was concerned that the international regulatory environment "increasingly lacks consistency" and said new rules in Switzerland, Britain and elsewhere could mean the bank has to change its structure.
Credit Suisse's private banking business pulled in net new assets of 18 billion francs, mirroring a strong performance at UBS, which reported its biggest inflow of client money since the financial crisis in the first quarter.
Credit Suisse said it had broad inflows across all client segments particularly in emerging markets, although its gross margin slipped 3 basis points to 118 basis points, which analysts said was disappointing. ($1 = 0.8800 Swiss franc = 0.6074 pound) (Additional reporting by Martin de Sa'Pinto; Editing by Hans Peters)