Warren Buffett omits Bank of America in annual report after share reduction

In the United States, Berkshire Hathaway's annual report, released on February 24, 2025, has drawn attention due to Warren Buffett's omission of Bank of America from the list of highlighted equity holdings. Barclays analyst Jason Goldberg noted this absence as peculiar given that Bank of America has long been among the conglomerate's top legal investments. This report comes after Berkshire significantly cut its Bank of America position from approximately one billion shares in mid-2024 to about 680 million shares by the end of that year, which has raised questions regarding the future of this relationship. The stake reduction has led to increased scrutiny from analysts and investors alike. Bank of America, a major player in the U.S. banking sector, boasts 69 million consumer and small business clients, supported by thousands of financial centers and ATMs across the country. Buffett’s decision to not mention it directly, unlike other significant investments such as Apple, American Express, and Coca-Cola, suggests a strategic shift in focus within Berkshire’s investment strategy. Buffett's historically significant stake in Bank of America began with a $5 billion investment in 2011, during a time of uncertainty following the Global Financial Crisis. Over the years, as conditions improved, Buffett capitalized on his investment, acquiring more shares in 2018 and 2019. Analysts had initially speculated that Berkshire adhered to a 700 million share threshold, above which significant tax implications would arise should they decide to sell. However, this new level of ownership, dropping below 700 million shares, contradicts previous assumptions. This analysis opens a broader conversation about Buffett's investment strategy and the valuation of banking stocks in the post-COVID-19 economic environment. With Bank of America reporting better-than-expected earnings in recent quarters related to investment banking and interest income, the overall market was surprised by Berkshire Hathaway’s action. Analysts argue that despite Buffett’s long-standing relationship with Bank of America, the company's declining presence in Berkshire's highlighted investments may signal a significant reassessment of its future potential in Buffett's portfolio.