March 5 (Reuters) – Harris Associates, one of Credit Suisse’s ( CSGN.S ) longest-standing major shareholders, has sold its entire stake in the Swiss bank after losing patience with its strategy to stem persistent losses and a customer exodus , the Financial Times reported on Sunday.
Harris, who had remained loyal despite a series of scandals at Credit Suisse, disclosed a stake of around 10% in the bank last August but reduced 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 when Saudi National Bank displaced it as the top investor, David Herro, vice chairman of Harris Associates, told the Financial Times .
“There is a question about the future of the franchise. There have been large outflows 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 plenty of other opportunities to invest,” he added. “Rising interest rates mean that many European finances are heading in the other direction. Why go for something that burns capital when the rest of the sector is now generating it?”
Herro confirmed to Reuters that Harris had sold shares of Credit Suisse in the market over the past few months. For other details, he referred Reuters to the paper’s report.
In an email to Reuters on Sunday, Credit Suisse said, “we are ahead of schedule and have clear strategic goals.”
“We are laser-focused on successfully executing our plan and progressing towards our goals to ensure the new Credit Suisse delivers sustainable value for all our stakeholders,” the statement added.
The bank, Switzerland’s second-largest, has also begun a major overhaul of its business, cutting costs and jobs to revive its fortunes, including creating a separate business for its investment bank under the CS First Boston brand.
Credit Suisse last month reported its biggest annual loss since the 2008 global financial crisis after jittery clients pulled billions from the bank, and it warned of a 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; Editing by Richard Chang and Bradley Perrett
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