According to Bloomberg News, Warren Buffet manifested that he is bullish on US retail banking but not on Wells Fargo & Co anymore.
The billionaire investor was found ending his long-running bet during the first quarter on Wells Fargo, as per a filing on Monday from Berkshire Hathaway Inc. Berkshire also reported new stakes in banking giant Citigroup Inc and in Ally Financial Inc, which is an auto lender.
Berkshire sold off Fargo stakes
Berkshire sold off the remaining Wells Fargo stakes after months of paring holding that ranked as the biggest common stock bet of the conglomerate once upon a time. Berkshire’s chief executive officer and chairman, Buffet, started building his investment portfolio at least 30 years ago and has for long lauded his business, adhering to the firm even after the scandal erupted in 2016.
The exit of Buffet comes as Charlie Scharf, the chief executive officer of Wells Fargo, continues grappling with legacy regulatory issues and is taking measures to improve efficiency, including a cut in jobs and exploration of prospective sales of the business. The shares of the San Francisco-based bank have dropped by about 12% in the current year.
Bloomberg News reports that Buffet had urged the board of Wells Fargo publicly not to recruit a leader from Wall Street. Although Scharf boasts of a track record of managing consumer-faced businesses and enhancing with technology, his resume features time he spent at JP Morgan Chase & Co, the securities industry giant, and the Bank of New York Mellon Corp. Scharf has also struck an agreement to operate from New York instead of the headquarters of San Francisco, which is a move that has been called by the business partner of Buffet, Charlie Munger, “outrageous”.
