Fitch downgrades Credit Suisse

HONG KONG: Fitch Ratings downgraded Credit Suisse Group´s long-term default rating by a notch to A-minus and its viability rating to a-minus from a, citing the Swiss bank´s reliance on difficult capital markets.

The agency also blamed the economic slowdown in the Asia-Pacific region which it said would put pressure on the lender´s new business model.

"We expect execution of strategic restructuring to remain more challenged by prevailing unfavourable fixed income and equities capital markets than was the case when it was announced in October last year, particularly in Europe and Asia," it said.

Earlier this month Switzerland´s second-biggest bank posted a second straight quarterly loss, in its worst start to a year since the financial crisis.

The bank´s mark-to-market losses in these two quarters were related mainly to securitised products, distressed credit and certain underwriting positions, Fitch said.

But the planned exit from distressed credit and European securitised trading, and sharp reduction in these exposures, would help earnings, it added.

Credit Suisse said the ratings agency acknowledged the positives in some of the bank´s strategies.