Harris Associates, once one of Credit Suisse’s largest and longest-standing shareholders, has sold its entire stake in the Swiss bank.
The decision comes after Harris lost confidence in Credit Suisse’s strategy to halt ongoing losses and reverse a significant client exodus.
Last August, Harris held around a 10% stake in Credit Suisse, but it reduced this to 5% by January.
Harris began reducing its exposure in October, following Credit Suisse’s capital raise of 4 billion Swiss francs ($4.3 billion) and the Saudi National Bank becoming the bank’s top investor.
David Herro, deputy chairman of Harris Associates, told the Financial Times, “There is a question about the future of the franchise. There have been large outflows from wealth management.”
In the fourth quarter, Credit Suisse experienced over 110 billion Swiss francs ($120 billion) in client withdrawals, accelerating the bank’s liquidity crisis.
Herro stated, “We have lots of other options to invest,” highlighting that rising interest rates are benefiting other European financial institutions, while Credit Suisse continues to face capital challenges.
Harris confirmed to Reuters that it had been selling its Credit Suisse shares in the market over the past few months.
Credit Suisse responded in an emailed statement to Reuters, saying, “We are ahead of our plan and have clear strategic objectives.”
The bank emphasized its focus on executing its strategy and achieving its targets to provide sustainable value for all stakeholders.
As part of its turnaround efforts, Credit Suisse has undertaken a significant restructuring, cutting costs and jobs, and establishing a separate entity for its investment banking activities under the CS First Boston brand.
Credit Suisse recently reported its largest annual loss since the 2008 global financial crisis, attributed to massive client withdrawals, and warned of further “substantial” losses in the coming year.
The bank’s current challenges underscore the urgency of its strategic overhaul to stabilize operations and regain client and investor confidence.
