Abu Dhabi, UAEThursday 1 October 2020

Warren Buffett's Berkshire Hathaway increases its stake in BofA

The company bought $2.07bn BofA stock since mid-July, expanding its stake to 11.9%

Warren Buffett's company said it paid $337 million for about 13.6 million Bank of America shares between July 31 and August 4. AP
Warren Buffett's company said it paid $337 million for about 13.6 million Bank of America shares between July 31 and August 4. AP

Warren Buffett's Berkshire Hathaway has spent $2.07 billion (Dh7.6bn) on Bank of America shares since mid-July, after winning regulatory permission to increase what was already its largest common stock holding other than Apple.

In a regulatory filing on Tuesday night, Berkshire said it paid $337 million for about 13.6 million Bank of America shares between July 31 and August 4.

It has purchased about 85.1 million of the bank's shares since July 20, giving it a total of 1.03 billion shares, or 11.9 per cent, worth $25.8 billion as of Tuesday's close.

Berkshire is the Charlotte, North Carolina-based lender's largest shareholder. It also invests in several other banks, including Wells Fargo and JPMorgan Chase.

Mr Buffett's assistant did not immediately respond on Wednesday to a request for comment. Bank of America did not immediately respond to similar requests.

In April, the Federal Reserve Bank of Richmond approved Berkshire's application to boost its Bank of America stake as high as 24.9 per cent, more than twice the usual 10 per cent limit for investors, according to a Richmond Fed spokesman.

Berkshire would have to file to become a bank holding company to increase its stake beyond 24.9 per cent.

Mr Buffett began investing in Bank of America in 2011, purchasing $5bn of preferred stock plus warrants to buy 700 million common shares, at a time many investors worried about the bank's capital needs.

Berkshire exercised the warrants in 2017 and sold preferred stock to cover the cost.

Adding Bank of America shares helps Berkshire reduce its cash stake, which totalled $137.2bn on March 31.

The Omaha, Nebraska-based conglomerate is also spending $4bn to acquire some gas assets from Dominion Energy, and may have repurchased billions of dollars of its own stock.

Berkshire is expected to report second-quarter results on Saturday.

Updated: August 6, 2020 02:46 PM

Editor's Picks
THE DAILY NEWSLETTER
Sign up to our daily email
Most Read