Billionaire investor Warren Buffett’s conglomerate, Berkshire Hathaway, has continued to shed its stake in Bank of America, raking in a staggering $9 billion in profits over the past few months. In its latest move, Berkshire offloaded 21.6 million shares of the bank’s stock, netting a cool $862.7 million. This marks the 10th time in 11 weeks that Berkshire has sold off its BofA holdings, totaling 218.5 million shares and reaping a whopping $8.9 billion in gains.
Despite the sell-off, Berkshire still maintains a significant 10.5% stake in the bank, valued at over $32 billion. Bank of America’s stock has taken a hit, falling roughly in line with the market since Buffett began selling his firm’s longest-held bank stock position. However, the bank’s shares are still up 16% year-to-date, lagging behind rivals Goldman Sachs, JPMorgan Chase, and Citigroup.
The motivations behind Berkshire’s selling spree remain unclear, with neither Buffett nor the company offering any insight. Bank of America CEO Brian Moynihan has downplayed the significance of the sales, saying that Berkshire remains the bank’s largest shareholder and that the company’s financial performance is expected to remain strong.
In fact, Bank of America’s CFO Alastair Borthwick has predicted that the bank’s net interest income, a key revenue stream, will rebound in the second half of the year, driven by rate cuts from the Federal Reserve and a recovering securities portfolio. Borthwick expressed optimism about the banking sector’s prospects, citing a favorable environment of low growth, low inflation, and stable interest rates.
Buffett’s history with Bank of America dates back to 2011, when he injected $5 billion into the struggling lender to help it recover from the subprime housing crisis. That investment not only bet on the bank’s recovery but also on Moynihan’s leadership, which has since stabilized the company. Despite the recent sell-off, Berkshire’s continued stake in Bank of America is a testament to Buffett’s enduring confidence in the bank’s prospects.
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