In recent months, Harris Associates, one of Credit Suisse’s largest shareholders, has liquidated its holdings in the Swiss bank, according to David Herro, deputy chairman, and chief investment officer of the activist investor located in Chicago. Herro made the announcement on Sunday.
Herro did not provide a justification for the stake sale, but earlier he had informed the Financial Times that Harris had sold the stake because he had grown impatient with Credit Suisse’s approach to dealing with its ongoing losses and client exodus.
Harris, who had remained dependable through a number of Credit Suisse problems, revealed a holding in the bank of roughly 10% in August of last year but decreased it to 5% in January.
Herro told the Financial Times, which broke the story that Harris had sold all of its shares, that Harris had started to reduce its stake in October when Credit Suisse raised 4 billion Swiss francs ($4.3 billion) from investors and when Saudi National Bank replaced it as the leading investor.
“The franchise’s future is a subject of debate. Large withdrawals from wealth management have occurred “Herro was quoted in the press as stating. With withdrawals of more than 110 billion Swiss francs during the fourth quarter, Credit Suisse observed a substantial increase in this trend.
We have a ton of other investment possibilities, he continued. “A lot of European financials are moving in the opposite direction as a result of rising interest rates. While the rest of the industry is now producing it, why choose something that is burning money?”
Credit Suisse stated, “We are ahead of our plan and have clear strategic objectives,” in an email to reporters on Sunday.
To guarantee that the new Credit Suisse creates sustainable value for all of our stakeholders, “we are laser-focused on successfully executing our plan and on making progress toward our aims.”
The bank, which is the second-largest in Switzerland, has also started a significant reform of its operations, slashing expenses and employment to turn around its financial situation. This includes setting up a separate company for its investment bank under the name CS First Boston.
When alarmed customers withdrew billions from the bank, Credit Suisse this month revealed its largest yearly loss since the global financial crisis of 2008. This year, it foresaw another “significant” loss.
