Warren Buffett’s Berkshire Hathaway cuts stakes in BoA and Citi amid US debanking concerns

Berkshire Hathaway, the investment conglomerate led by Warren Buffett, reduced its holdings in US banks Bank of America (BoA) and Citigroup shares in the final quarter of 2024. The move, disclosed in a regulatory filing on Friday, comes as Buffett continues to trim Berkshire’s stock portfolio, favoring safer investments such as US Treasury bills.

Berkshire slashed down nearly three-quarters of its position in Citigroup, selling 40.6 million shares valued at over $2.4 billion. The firm also continued to unload shares of Bank of America, which it had previously owned a 13% stake, being its largest shareholder for the last 2 years. 

After waiting for the regional banking crisis that started in early 2023 to settle, Buffett began reducing his position last July. By September 2024, the conglomerate had sold over $10 billion BoA shares.

Shift in investment strategy

Since mid-October last year, Berkshire has cut its BoA stake by an additional 95 million shares, bringing its ownership to approximately 8.9%. The conglomerate also sold 1.7 million shares in Capital One, reducing its position in the credit card-focused bank by nearly 20%.

According to a Friday report by the Wall Street Journal, the company also disclosed a new $1.2 billion stake in Constellation Brands, the company behind Modelo and Corona beer in the US, as part of its latest investment moves. The position, unveiled in a regulatory filing, marks one of the few additions to the conglomerate’s portfolio in the Q4 2024 sell-offs. 

Its new bet on Constellation Brands, however, is currently on “shaky” prospect grounds. In January, the beverage company missed earnings expectations and cut its financial outlook for the year, leading to a 26% decline in its stock price since the start of 2025.

Investors had been closely watching whether Warren Buffett’s firm would continue trimming its stake in Apple for a fifth consecutive quarter. However, as of Dec. 31, Berkshire still held 300 million shares of the consumer-electronics giant, making it the firm’s largest stockholding with a valuation of $75.1 billion. As of now, Apple is ahead of American Express and Bank of America in the company’s portfolio rankings.

Debanking allegations could have fueled sales

While a snippet of the Form 13F filings seen by WSJ provide insight into Berkshire’s stock positions, they do not reveal the rationale behind the trades. Investors are expected to scrutinize Buffett’s annual letter, set for release on Feb. 22, for any commentary on the recent investment decisions. 

Still, policymakers from both parties, Republicans and Democrats, see debanking as an obstinate issue that has led companies to shy away from doing business with Banks. In his speech at the World Economic Forum held at Davos, President Donald Trump accused BoA of “political debanking,” for allegedly denying conservatives services.

As reported by Cryptopolitan, the bank was also mentioned during the February 5 Senate Banking Committee debanking hearing by Senator Elizabeth Warren, alongside CitiBank, Wells Fargo, and JP Morgan. 

Citi shares yields were below expectations

Berkshire’s 2022 investment in Citigroup, worth $3 billion at the time, has not seen the same success as its long-standing stake in BoA. Under CEO Jane Fraser, Citi has struggled to catch up with its competitors despite a massive restructuring plan announced in late 2023.

Fraser had previously stated that Buffett expressed support for her turnaround strategy. However, Citi’s profitability remains below that of its peers. The bank’s return on tangible common equity rose to 7% in 2024, up from 4.9% the previous year, but still fell short of its original 11-12% target for 2026, which was revised downward to 10-11% in January.

According to the Financial Times, Citi has made progress in cutting costs, with operating expenses decreasing by 4% in 2024, including a 2% reduction in staff-related expenditures. However, these measures have yet to significantly boost investor confidence.

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