Former top Credit Suisse shareholder sells full stake in bank – FT

(Reuters) – Harris Associates, one of Credit Suisse’s longest major shareholders, has sold its entire stake in the Swiss bank after losing patience with its strategy to stop persistent losses and a client exodus, the Financial Times reported on Sunday.

Harris had been loyal to the bank despite numerous scandals. In August, Harris disclosed that he owned 10% of the bank’s stock, but it was reduced to 5% in January.

Harris Associates began to decrease its exposure after Credit Suisse raised four billion Swiss francs from investors ($4.27 trillion). When Saudi National Bank replaced Harris Associates as the largest investor, David Herro (deputy chairman) told Financial Times.

“There is a question about the future of the franchise. There have been large outflows from wealth management,” Herro’s statement was quoted by the newspaper. Credit Suisse noted a rapid acceleration of withdrawals during the fourth quarter. Outflows totalled more than 110 billion Swiss Francs (120 billion).

“We have lots of other options to invest,” He concluded. “Rising interest rates mean lots of European financials are headed in the other direction. Why go for something that is burning capital when the rest of the sector is now generating it?”

Harris Associates didn’t immediately reply to a Reuters inquiry for comment.

Credit Suisse stated in an emailed statement sent to Reuters Sunday that “we are ahead of our plan and have clear strategic objectives.”

“We are laser focused on successfully executing our plan and on progressing toward our targets to ensure new Credit Suisse delivers sustainable value for all our stakeholders,” The statement was added.

The second largest bank in Switzerland has begun a massive overhaul. It is cutting costs, creating jobs and trying to revitalize its fortunes.

Credit Suisse reported last month its largest annual loss since 2008’s global financial crisis. It was hit by a rash of clients who took billions out of the bank. The bank also warned about a possible further decline. “substantial” Loss this year

($1=0.9357 Swiss francs)

(Reporting from Bengaluru by Gokul Pisharody; additional reporting by Akriti Sharma; editing by Richard Chang