Fitch Ratings has affirmed the ratings of Credit Suisse Group, saying that its ratings reflect the good franchise in its diversified core businesses of private, retail and investment banking and asset management, sound risk management, strong capitalization and improved performance.

“Credit Suisse has made good progress in creating an integrated financial services group, as its sound performance demonstrates,” says Christian Scarafia, senior director at Fitch’s Financial Institutions group. “Although the strong performance in investment banking in 2006 and H107 partly reflected attractive market conditions, Credit Suisse’s revenue sources are increasingly diversified, which should help the group to manage more difficult market conditions. The group’s ratings could benefit from proven resilience to the current severe market dislocation.”

Fitch considers the CSG’s risk controls sound. Risk exposure in Credit Suisse’s investment banking activities has increased gradually since 2005, it notes. The group is active in leveraged finance, residential and commercial mortgage business and credit trading, where market conditions have deteriorated, but exposures to these sectors remain well-controlled.

In Fitch’s opinion, a prolonged weakness of credit markets might result in an increase in on-balance sheet exposure to leveraged transactions and pressure on revenues from these segments, but overall exposure should remain manageable.

CSG’s funding remains strong and benefits from diversfied sources. Funding has been centralised, and Credit Suisse has become the group’s sole issuer of debt securities, it notes. Fitch says it considers CSG’s capitalisation strong.