Swiss banking giant Credit Suisse posted CHF 1.6bn (US$1.49bn) in Q209 profit, from CHF 1.2bn in the year-ago quarter. The gain comes as the firm said its investment banking division “reduced our exposure to the areas we decided to exit.” Trading among US residential mortgage-backed securities (RMBS), in particular, drove CHF 5.3bn (Switzerland francs) of revenue in the quarter. “Asset-backed and mortgage-backed securities markets continued to see improved liquidity,” Credit Suisse said, “despite evidence of rising defaults, including in the commercial mortgage-backed sector,” where the firm took CHF 307m of net write-downs in the quarter. The firm’s wealth management division reported net revenues of CHF 2.07bn, up from CHF 1.92bn in the previous quarter. But changes may be coming to this business segment, according to a letter signed by chairman of the board of directors Hans-Ulrich Doerig and CEO Brady Dougan in the firm’s earnings release. “We have continued to prepare our Wealth Management business for the new environment by expanding our international footprint and building an efficient, global platform that complies with applicable laws and regulations,” they said. Tax regulations between Switzerland and the US may soon add to compliance issues at the firm. Last month, the US Treasury Department noted the conclusion of negotiations with Switzerland to amend the US-Switzerland income tax treaty will provide for increased tax information exchange between the countries. Official signing of the protocol, however was expected within a “few months” of the Treasury’s announcement at the time. “This Administration is committed to reducing off shore tax evasion to help ensure that all US taxpayers are playing by the same rules,” said Treasury secretary Tim Geithner in the announcement. “This treaty will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion.” Write to Diana Golobay.