Credit Suisse Has Top Investor Betting Big on Thiam’s Turnaroundby and
Harris Associates increased stake to more than 10%, Herro says
Swiss bank could trade at 1.5 times book value, Herro says
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam has at least one investor that keeps betting bigger on his turnaround.
Harris Associates increased its stake in Switzerland’s second-largest bank to more than 10 percent, Chief Investment Officer David Herro said by e-mail on Monday. The Chicago-based company owned about 9 percent on June 14, he said at the time.
Since taking over in July 2015, Thiam has restructured businesses to shift away from securities trading and focus on wealth management. While the shares pared some losses after hitting a record-low in July as the U.K.’s decision to leave the European Union sparked a wider market selloff, the company has lost about 47 percent of its market value this year.
“If they do this transformation right, this is a business that should trade for at least 1.5 times book value because the growth and the income that the book is generating should be a lot more stable coming out of that private bank,” Herro told Tom Keene and Francine Lacqua in an interview on Bloomberg Radio on Monday. “If they can follow through the execution of this plan, this bank has got a lot more upside.”
The decline in shares have left the bank with a market valuation that reflects a price to book ratio of about 54 percent, indicating that it’s worth less than investors would expect to receive if the firm liquidated its assets. Deutsche Bank AG, which is also restructuring its businesses, trades at about 26 percent.
A spokesman for Credit Suisse declined to comment.