Warren Buffett's Berkshire Hathaway increases its stake in BofA

The company bought $2.07bn BofA stock since mid-July, expanding its stake to 11.9%

FILE - In this May 5, 2019, file photo Warren Buffett, Chairman and CEO of Berkshire Hathaway, smiles as he plays bridge following the annual Berkshire Hathaway shareholders meeting in Omaha, Neb. Buffett's company has purchased another $400 million of Bank of America stock less than a week after buying roughly $800 million of the bank's stock. Berkshire Hathaway Inc. said Monday, July 27, 2020 it held 998 million Bank of America shares after the latest purchases, which represents roughly 11.5% of the bank's stock. (AP Photo/Nati Harnik, File)

Warren Buffett's Berkshire Hathaway has spent $2.07 billion (Dh7.6bn) on Bank of America shares since mid-July, after winning regulatory permission to increase what was already its largest common stock holding other than Apple.

In a regulatory filing on Tuesday night, Berkshire said it paid $337 million for about 13.6 million Bank of America shares between July 31 and August 4.

It has purchased about 85.1 million of the bank's shares since July 20, giving it a total of 1.03 billion shares, or 11.9 per cent, worth $25.8 billion as of Tuesday's close.

Berkshire is the Charlotte, North Carolina-based lender's largest shareholder. It also invests in several other banks, including Wells Fargo and JPMorgan Chase.

Mr Buffett's assistant did not immediately respond on Wednesday to a request for comment. Bank of America did not immediately respond to similar requests.

In April, the Federal Reserve Bank of Richmond approved Berkshire's application to boost its Bank of America stake as high as 24.9 per cent, more than twice the usual 10 per cent limit for investors, according to a Richmond Fed spokesman.

Berkshire would have to file to become a bank holding company to increase its stake beyond 24.9 per cent.

Mr Buffett began investing in Bank of America in 2011, purchasing $5bn of preferred stock plus warrants to buy 700 million common shares, at a time many investors worried about the bank's capital needs.

Berkshire exercised the warrants in 2017 and sold preferred stock to cover the cost.

Adding Bank of America shares helps Berkshire reduce its cash stake, which totalled $137.2bn on March 31.

The Omaha, Nebraska-based conglomerate is also spending $4bn to acquire some gas assets from Dominion Energy, and may have repurchased billions of dollars of its own stock.

Berkshire is expected to report second-quarter results on Saturday.

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