UPDATE 1-C.Suisse CEO says no plans for capital hike -paper
* C.Suisse says no plans for capital hike
* CEO Dougan says retained earnings to boost capital base
* Dougan says has no plans to step down but admits mistakes
* Hopes for U.S. tax deal soon
* C.Suisse says SNB capital calculation "incomplete"
ZURICH, June 17 (Reuters) - Credit Suisse has no plans to issue new shares after the Swiss central bank called on it to improve its capital base this year, but should be able to do so by retaining earnings, Chief Executive Brady Dougan was quoted as saying on Sunday.
"Of course I am disappointed. FINMA has given us directions as to how we should strengthen capital. We are fulfilling those," Dougan told the SonntagsZeitung paper in an interview.
"Even more surprising were the suggestions by the SNB to cut the dividend and to raise capital."
In its annual financial stability report published on Thursday, the Swiss National Bank (SNB) said Credit Suisse should urgently boost its loss-absorbing capital base by cutting risk, suspending dividends or issuing shares, sending the stock down 10 percent.
Dougan noted that FINMA is the regulator of the Swiss banks, rather than the SNB but said the bank was still taking the central bank's comments seriously. However, he rejected the idea of a capital hike: "That is not our plan".
"We assume that we will generate enough profit in the coming quarters to create extra equity capital," he said, adding that the bank was also offering shareholders the choice of receiving their dividends in shares, which demands less capital.
The criticism from the SNB has increased pressure on Dougan, who was lauded for navigating the bank through the subprime crisis relatively unscathed, but has come under fire of late for squandering that advantage as the bank's shares languish.
Dougan told the paper he had no plans to step down and was working closely with the board, but admitted some mistakes.
"Last year we massively cut the cost base. From today's perspective, I must concede that the critics were right who said we should have acted even earlier," he said.
Dougan added he was particularly surprised about the public criticism from the SNB as Chairman Thomas Jordan had not discussed the need for Credit Suisse to cut its dividend and raise capital when the two men met for lunch just 10 days ago.
He said the SNB's calculations of Credit Suisse's capital were incomplete and based on a very pessimistic scenario for the euro zone debt crisis, adding the report had shaken the confidence of clients and investors: "That is not just bad for us but for the whole financial centre."
Dougan rejected suggestions the SNB's concern was related to a U.S. investigation into whether the bank helped wealthy Americans evade taxes by providing secret offshore accounts.
The bank is expected to have to pay a hefty fine and hand over U.S. client names as part of a settlement.
Oswald Gruebel, a former Credit Suisse CEO, said the bank's shares had fallen sharply on Thursday because shareholders were afraid that the bank would have to raise capital.
"But CS also has the possibility to cut its balance sheet and thereby indirectly increase its capital, or do both," Gruebel wrote in his weekly column for Der Sonntag newspaper.
But Hans Geiger, a retired Zurich University banking professor and a former senior executive at Credit Suisse, said the bank was ill advised to try to fight the SNB.
"The reaction of CS is fatal," Geiger told the Tages-Anzeiger newspaper on Saturday. "Whoever goes on a confrontation course with the national bank has lost their reason."
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