Buffett confident BofA will overcome mistake

Brian Moynihan With Batphone

Warren Buffett, who invested $5bn in Bank of America, said he’s confident the lender will overcome an accounting mistake that forced the firm to suspend an increased payout to shareholders.

'That error they made does not bother me', Buffett said on May 3 at Berkshire’s annual meeting in Omaha, Nebraska. 'You do the best you can'.

Bloomberg News reports that Bank of America halted $4bn of share repurchases and a boost to its common-stock dividend on April 28 after finding the mistake in a stress-test submission to the Federal Reserve. The bank’s error, which had gone undetected since 2009, didn’t affect earnings.

'It doesn’t change my feeling about Bank of America or its management', said Buffett, 83.

His Berkshire Hathaway made the $5bn investment in Bank of America in 2011, receiving preferred stock and warrants to buy 700m shares for $7.14 apiece. That effectively makes the bank Berkshire’s fifth-largest equity position, 'and one we value highly', Buffett wrote in his annual letter to shareholders.

To access the complete Bloomberg article hit the link below:

BofA Forgiven as Buffett Says 'You Do the Best You Can'

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