March 5 (Reuters) – Harris Associates, one of the largest shareholders in Credit Suisse (CSGN.S), has sold its entire stake in the Swiss bank after becoming impatient with its strategy to stem ongoing losses and customer exodus, the Financial Times reports. Sunday.
Harris, who has 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.
David Hero, vice-chairman of Harris Associates, told the Financial Times that Harris began reducing his exposure in October, after Credit Suisse raised 4 billion Swiss francs ($4.3 billion) from investors, and when Saudi National Bank replaced it as the largest investor. .
“There is a question about the future of the franchise. There have been large inflows from wealth management,” Hero was quoted as saying. Credit Suisse reported a sharp acceleration in withdrawals in the fourth quarter, with outflows of more than CHF110 billion ($120 billion).
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“We have many other options for investment,” he added. “Rising interest rates mean a lot of European financial institutions are going the other way. Why go for something that is burning capital while the rest of the sector is now generating it?”
Hero confirmed to Reuters that Harris had sold shares in Credit Suisse on the market over the past few months. For other details, Reuters referred to the newspaper report.
“We are ahead of our plan and have clear strategic objectives,” Credit Suisse said in a statement emailed to Reuters on Sunday.
“We are focused on successfully executing our plan and progressing towards our goals to ensure the new Credit Suisse delivers sustainable value to all of our stakeholders,” the statement added.
The bank, the second largest in Switzerland, 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 announced its biggest annual loss since the 2008 global financial crisis after excited customers withdrew billions from the bank, and warned of another “significant” loss this year.
($1 = 0.9357 Swiss francs)
Additional reporting by Gokul Picharody in Bengaluru and Elisa Martinuzzi; Additional reporting by Akriti Sharma and Gopi Babu. Editing by Richard Chang and Bradley Perrett
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