UPDATE 3-C.Suisse sees itself a winner in market shakeout

(updates shares after rate cut, more quotes and background)

By Lisa Jucca

ZURICH, Oct 8 (Reuters) - Swiss bank Credit Suisse (CSGN.VX) predicted on Wednesday it would emerge as a winner from the current financial sector turmoil and was looking at possible purchases, though the business environment remained challenging.

The credit crisis that has rattled financial markets for over a year has deepened dramatically since September's collapse of U.S. investment bank Lehman Brothers, prompting governments in the United States and Europe to rush to rescue many players.

Credit Suisse Chief Executive Officer Brady Dougan said his bank's strong balance sheet and good client flows in both investment banking and private banking have put it in a position to benefit when the market finally turns around.

"There are fewer market participants. The opportunities for those who remain will be stronger than ever. Credit Suisse will be among them," Dougan said in a webcast of a presentation at a Merrill Lynch conference in London.

But "it's impossible to predict when the market will turn," he added.

Credit Suisse, whose shares have performed relatively well since the start of the crisis, continued to trade broadly in line with the European banking sector .SX7P after central banks across the globe joined forces to cut rates in a bid to revitalise markets. The stock was down 3.15 percent at 48.64 Swiss francs by 1329 GMT.

Shares in Swiss bank rival UBS (UBSN.VX), which has made more writedowns than any other European bank in the current crisis, rose marginally to outperform the sector.

Credit Suisse said it had continued to reduce its exposure to risky assets after cutting it at an early stage, and noted that the spreads on its credit default swaps were narrower than most rivals. They stood at 106 basis points on Oct. 3.

Dougan also said that a potential negative impact from fallout at hedge funds and prime brokerages was not an issue for the bank.

OPPORTUNITIES IN PRIVATE BANKING

Dougan said his private banking arm had benefited from strong net new assets despite volatile market conditions in the third quarter of this year and was able to pick up talent from other struggling competitors.

"The business has been resilient, despite the market's dislocation," he said.

The Swiss bank, which has not yet joined the banking consolidation wave as stronger lenders pick up the spoils of those on the verge of collapse, was readying to acquire in the wealth management segment, he said.

Dougan said he did not believe the Swiss government would need to rescue its banks in the way other countries around Europe had. He said Credit Suisse's balance sheet was strong enough to withstand even this leg of the crisis.