Zurich - Credit Suisse became the first major European bank to unveil its third-quarter earnings Thursday warning that the banking business faced continuing tough conditions after the big Swiss bank confirmed a 1.26 billion Swiss-franc (1.08 billion dollars) quarterly loss.

Unveiling the third quarter results, the chief of Switzerland's second biggest bank Brady Dougan said: "We expect the market environment to remain very challenging and we are cautious with regard to the outlook for the fourth quarter."

Dougan went on to say that the third-quarter result was "clearly disappointing" but "understandable" considering the turmoil that has engulfed financial markets in recent weeks.

It was Credit Suisse's second quarterly loss this year with the bank reporting a third-quarter profit of 1.3 billion Swiss francs last year. The release of the results triggered a more than 3 per cent fall in Credit Suisse's shares.

Credit Suisse's latest results also came one week after the bank announced it was seeking an additional 10 billion Swiss francs from its key investors.

Hard hit by the global financial upheaval unleashed by the US subprime mortgage meltdown, Credit Suisse confirmed it ran up 2.4 billion Swiss franc writedowns in the third quarter but said it had cut its exposure to the toxic assets at the heart of the crisis.

But while the bank said its private banking unit had drawn in 14.5 billion francs in net new assets during the latest quarter, its asset management operations recorded outflows totalling 16.5 billion francs as clients withdrew assets. (dpa)