Credit Suisse said this morning that it reduced its exposure to toxic US assets in the third quarter of 2008.

However, the Swiss bank gave warning that the rest of the year will be challenging as it copes with the fallout from the global credit crisis.

Credit Suisse said it had reduced its risk exposure to leveraged finance from SwFr14.3 billion (£7.5 billion) in the second quarter to SwFr11.9 billion, while its exposure to commercial mortgage-backed securities fell from SwFr15 billion to SwFr12.8 billion.

However, it continues to hold SwFr6.8 billion of residential mortgage and sub-prime collateralised debt obligations.

Brady Dougan, chief executive of Credit Suisse, said: “We expect the market to remain very challenging and we are cautious with regard to the outlook for the fourth quarter.”

But the group said it was well positioned and the effect of the collapse of Lehman Brothers last month was immaterial.

Credit Suisse confirmed its third-quarter SwFr1.3 billion loss that was announced last week alongside a SwFr10 billion capital injection from three investors, including the Qatar Investment Authority, a government-controlled fund, to bolster its reserves.

Credit Suisse has proved relatively resilient to the credit crisis and has a Tier 1 ratio — a measure of financial strength — of 13.7 per cent, making it one of the world’s best capitalised banks. Its share price has fallen by about 30 per cent since the start of the year, compared with an average 50 per cent fall for other European banks.

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