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Warren Buffett Says to Bank of America ‘You Do the Best You Can’
Warren Buffett invested $5 billion in Bank of America Corp., and said that according to Bloomberg News, he is confident the lender will overcome an accounting mistake that forced the firm to suspend an increased payout to its shareholders.
“That error they made does not bother me,” Warren Buffett 83 reported on on May 3 at Berkshire’s annual meeting in Omaha, Nebraska. According to Bloomberg News Buffett said that, “You do the best you can.”
According to Investment News, Bank of America had announced a deal with Warren Buffett in February to change the terms so that the investment is treated more favorably by the bank’s regulators.
On April 28 after finding the mistake in a stress-test submission to the Federal Reserve, Bank of America stopped $4 billion of share repurchases and a boost to its common-stock dividend. Even though it’s hard to tell, according to WarrenBuffett.com, the core business of Bank of America earns about $1 billion per month in net profit. In 2010, Forbes Magazine listed Bank of America as the third biggest company in the world.
The Charlotte, North Carolina-based bank’s error, which had gone undetected since 2009, did not affect earnings. Warren Buffett said that, “It doesn’t change my feeling about Bank of America or its management,” according to Bloomberg News.
The Bank of America is the third-largest non-oil company in the U.S. after Walmart and General Electric. “It is important for you to realize that Bank of America is, in effect, our fifth largest equity investment and one we value highly. We can buy 700 million shares of Bank of America at any time prior to September 2021…We are likely to purchase the shares just before expiration of our option,” said Warren Buffett in his 2013 letter to shareholders.
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Image credit: www.telegraph.co.ukWarren Buffett Says to Bank of America ‘You Do the Best You Can’ by Jaan