Warren Buffet exited two positions with US banks last quarter, as he raised his commitment to Bank of America (BAC), and bought new stock in Capital One (COF).
According to filings, Buffet’s investment conglomerate, Berkshire Hathaway (BRK-A) (BRK-B) offloaded its $1.4 billion positions in custody bank Bank of New York Mellon (BK) and Minneapolis regional lender US Bancorp (USB),
They become the latest of the billionaires long running bank positions to be cut. Between 2020 and 2022, the billionaire sage dispensed with a large portion of Berkshire’s positions in US banks, just months ahead of the blowup in the banking sector which began in the middle of March.
Over the past decades, the 92-year old billionaire has rescued a number of institutions, including during the 2008 banking crisis. So far he has yet to be seen publicly doing the same during this crisis.
At Berkshire’s annual shareholder’s meeting earlier this month, he made it clear to shareholders he was still feeling “cautious” about holding many stocks. The one bank he cited as an exception was Bank of America, which is among Berkshire’s largest holdings.
Filings showed that in the first quarter of 2023, Berkshire’s Bank of America holdings increased by 2 percent, even as the fund’s total position in the stock fell $4 billion over the course of the quarter.
At his shareholder meeting in Omaha, Nebraska Buffet said, “I like Bank of America and I like the management.”
Buffet’s history with Bank of America goes back. In 2011, as the bank’s shares were reeling under the pressure of significant losses due to the subprime loan crisis, Buffet injected $5 billion into the Charlotte, NC-based bank. At the time the bank’s chief executive, Brian Moynihan was still relatively new to the job.
Over the first quarter, Buffet did invest more heavily into a number of other financial stocks. Berkshire purchased $954 million of Capital One (COF) and increased its position in Ally Financial (ALLY) by $10.6 million. It also offloaded $1.1 million in Jeffries Financial Group (JEF). It made no changes to its position in Citigroup (C).
Berkshire was not alone among investment managers in offloading shares of banks in the previous quarter.
The world’s largest hedge fund, Bridgewater Associates, cut roughly $180 million in bank stocks, including over 80 percent of its positions in Bank of New York Mellon and US Bancorp. The hedge fund also eliminated its positions in 15 other US banks, including Bank of America (BAC), Western Alliance, Zions (ZION), PacWest (PACW) and New York Community Bank (NYCB).
