Credit Suisse is well-positioned as the credit crisis continues, having cut its exposure, but the worst of the turmoil is not over for the sector, the Swiss bank's head was quoted as saying.
The bank was well protected against any further trouble in subprime mortgages, while its bigger exposure in corporate finance was more transparent and carried less risk, Chief Executive Brady Dougan said in an interview.
"There are fields such as corporate mortgages and credit for corporate take-overs where we are clearly more exposed. We will need some more patience there," Dougan told Switzerland's Tages-Anzeiger newspaper in an interview.
"In corporate finance we held obligations worth 60 billion Swiss francs ($52.31 billion) at end-September, which have been reduced since then," he also said. Those positions carried less risk because they were transparent and backed by good counterparty assets.
Credit Suisse's investment bank was hit by writedowns of more than 2.2 billion francs in November, a modest blow when compared to other banks, particularly UBS, which last week announced $10 billion in fresh writedowns.
"Credit Suisse is well positioned in the current situation, and we are very confident about the mid- and long-term prospects. However, I wouldn't say the worst is over yet with the same degree of confidence," Dougan also said.
Most credit trouble could be past in six months if global growth remained solid, but the crisis might drag on for another year if it sparked a global recession, Dougan said. Chances that would happen were rising, the bank's economists had said.
Mergers and acquisitions in the banking sector will suffer in the coming 12 to 18 months because it was hard for buyers to assess the risk on balance sheets, Dougan also said.
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