Berkshire Hathaway Just Sold 3 Bank Stocks. Here’s Why Investors Should Take Notice
Key Points
Berkshire Hathaway reduced its positions in Capital One, Bank of America, and Ally Financial.
The Capital One sale was the largest in percentage terms, while Bank of America had the largest dollar amount.
Ally appears to be a position-sizing move, as Berkshire aims to maintain less than 10% ownership.
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Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) has historically been one of the largest shareholders of U.S. banks, and that's still true today. The conglomerate maintains large stakes in Bank of America (NYSE:BAC) and American Express (NYSE:AXP), while also holding several smaller positions in the financial sector.
New CEO Greg Abel and his team might be souring on the banking industry, or at least might see good reasons to reduce exposure to it. In the most recent quarter, Berkshire sold shares of three bank stocks, while simultaneously pouring billions of dollars into the technology sector.
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There's more to the story, however. Here's a rundown of Berkshire's three bank reductions, and what investors should keep in mind.
The 3 bank stocks Berkshire sold
Berkshire Hathaway was a net buyer of stocks in the second quarter for the first time in several years. But that's not the case when it comes to the financial sector. As mentioned, Berkshire reduced its stakes in three bank stock positions:
- Capital One (NYSE:COF) was reduced by 58%, the sharpest percentage decline. Berkshire now owns about $646 million of Capital One stock, representing about a 0.5% stake in the company.
- Bank of America (NYSE:BAC) was reduced by $1.7 billion, as Berkshire sold 30.2 million shares. It now owns 483.4 million shares, and Bank of America remains one of the largest holdings in the portfolio.
- Ally Bank (NYSE:ALLY) was the smallest of the three sales, with Berkshire reducing its stake by 7%. Berkshire now owns 8.9% of Ally, a stake valued at about $1.14 billion.
Let's put this in some context. Capital One experienced a significant reduction in its position. Berkshire sold about $750 million in the bank's stock (we don't know the exact selling price). Bank of America was the largest sale by dollar amount, and Berkshire has been gradually selling shares over the past few quarters, but it remains a massive part of Berkshire's portfolio. Even after the sale, Berkshire owns nearly 7% of Bank of America, a stake worth more than $30 billion.
Finally, don't read too much into the Ally sale. After the reduction, Berkshire owns about 9% of Ally and, for regulatory reasons, aims to keep this stake below 10%. So, this could simply be a sale to ensure that Ally buybacks wouldn't push it above the threshold.
Why did Berkshire sell bank stocks?
To be sure, we don't know exactly why Berkshire sold. Leadership generally doesn't discuss the specific motivation behind individual transactions. There could be concerns about consumer credit deteriorating, which could explain the sharp reduction in credit card-focused Capital One, in particular.
Berkshire could also potentially be worried about interest rate risk. Rising interest rates are good for banks in some ways, but banks that typically offer minuscule deposit rates (like Bank of America) could have a tougher time competing in a "higher for longer" environment without raising deposit rates, which would cut into margins.
Another explanation could be valuation or position sizing. Between American Express and Bank of America alone, the portfolio is rather concentrated in the financial sector. The sector has performed extremely well in 2026, and this could be a bit of profit-taking in names that have made Berkshire quite a bit of money.
The bottom line is that we don't know for sure. And just because Berkshire sold shares of these stocks doesn't necessarily mean that you should do the same. Full disclosure: Bank of America is one of my largest investments, and I'm not selling a single share because Berkshire did. But it is causing me to take a step back and keep a closer eye on the health of the U.S. consumer to watch for cracks forming.
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Bank of America is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Matt Frankel, CFP® has positions in American Express, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.
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