UPDATE 1-Credit Suisse says suffers no loss from VelocityShares fall

(Adds Credit Suisse statement, background)

ZURICH, Feb 6 (Reuters) - Credit Suisse said on Tuesday it had not suffered any loss on a volatility product that plunged on Monday when equities markets sold off sharply.

Credit Suisse said earlier that it faced no material impact from the plunge overnight in the VelocityShares ETN product which it issued and in which it has a 32 percent stake.

"Credit Suisse confirms that it has experienced no trading losses from Velocity Shares Daily Inverse VIX Short Term ETNs (XIV) due December 4, 2030," the Swiss bank said.

Monday's stock market rout left two of the most popular exchange-traded products (ETPs), which investors use to benefit from calm rather than volatile conditions, facing potential liquidation, market participants said.

The VelocityShares Daily Inverse VIX Short-Term ETN sank 84 percent in after-hours trading, while the ProShares Short VIX Short-Term Futures ETF fell nearly 79 percent as investors questioned if they could survive the volatility.

"The XIV ETN activity is reflective of today's market volatility. There is no material impact to Credit Suisse," the bank had said in a statement.

A source familiar with the matter said the bank's exposure to the U.S.-based product launched in 2010 was fully hedged.

Credit Suisse has around 4.8 million units of the product.

Such ETPs seek to provide inverse exposure to VIX short-term futures and, when that measure spikes, the investment loses value, at which time ETP issuers could liquidate the shares.

It was not immediately clear if the issuers would opt to liquidate these products. (Reporting by Michael Shields in Zurich, Trevor Hunnicutt in New York and Ismail Shakil in Bengaluru; editing by Jason Neely and Alexander Smith)