March 5 (Reuters) – Harris Associates, one of the longest major shareholders of Credit Suisse (CSGN.S), has sold its entire stake in the Swiss bank after losing patience with its strategy of avoiding continued losses and an exodus of customers. stop, reported the Financial Times. on Sunday.
Harris, who had remained loyal despite a series of scandals at Credit Suisse, announced a stake of about 10% in the bank last August, but cut it to 5% in January.
Harris had begun reducing its exposure in October after Credit Suisse raised 4 billion Swiss francs ($4.3 billion) from investors and as Saudi National Bank supplanted it as the top investor, David Herro, deputy chairman of Harris Associates, told the Financial Times.
“There is a question about the future of the franchise. There has been a large outflow from asset management,” the newspaper quoted Herro as saying. Credit Suisse reported a sharp acceleration in withdrawals in the fourth quarter, with outflows of more than 110 billion Swiss francs ($120 billion).
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“We have many other options for investing,” he added. “Rising interest rates mean many European financial institutions are going the other way. Why choose something that burns capital when the rest of the industry is now generating it?”
Herro confirmed to Reuters that Harris had been selling shares of Credit Suisse on the market in recent months. For other details, he referred Reuters to the newspaper report.
In a statement emailed to Reuters on Sunday, Credit Suisse said, “We are ahead of our plan and have clear strategic objectives.”
“We are focused on successfully executing our plan and achieving our goals to ensure the new Credit Suisse delivers sustainable value for all our stakeholders,” the statement said.
The bank, Switzerland’s second largest, has also begun a major overhaul of its operations, cutting costs and jobs to revive its fortunes, including creating a separate venture for its investment bank under the brand CS First Boston.
Credit Suisse last month reported its biggest annual loss since the 2008 global financial crisis after hounded customers took billions from the bank, and warned of further “significant” loss this year.
($1 = 0.9357 Swiss Francs)
Reporting by Gokul Pisharody in Bengaluru and Elisa Martinuzzi; Additional reporting by Akriti Sharma and Juby Babu; Edited by Richard Chang and Bradley Perrett
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