Citigroup Hikes As Buffett Ups Stake
Date
5/17/2022 10:15:38 AM
(MENAFN- Baystreet.ca)
Citigroup Hikes as Buffett Ups Stake
Citigroup (NYSE:C) shares got a boost from Warren Buffett who just disclosed a big stake in the struggling bank.
The bank stock jumped after a filing revealed Monday evening that Buffett's berkshire hathaway (NYSE:BRK.A) added more than 55 million shares to build a stake worth $2.95 billion as of the end of March.
The 91-year-old“Oracle of Omaha” scooped up Citi shares while they have been underperforming the rest of the financial sector in the past 12 months. The stock is down nearly 40% while the Financial Select Sector SPDR Fund is off by 12% over the same period.
Citi welcomed Jane Fraser as its new CEO a year ago, the first female chief of a major U.S. bank. She has set a medium-term target of 11% to 12% for return on tangible common equity, aiming to overhaul a company that has deeply underperformed U.S. rivals for years.
Fraser has opted to exit less-profitable parts of the firm's global empire, including leaving 13 retail markets across Asia and Europe.
Citi now joins some of those rivals in Buffett's portfolio. Berkshire owned $41.6 billion of Bank of America (NYSE:BAC) at the end of March, marking its second biggest holding next to Apple. Berkshire has owned Bank of American since 2017.
Berkshire built a $390 million new stake in Ally Financial (NYSE:ALLY). The stock jumped 4% in pre-market trading Tuesday after the disclosure.
The conglomerate also held shares in Bank of NY Mellon (NYSE:BK), U.S. Bancorp (NYSE:USB), Mastercard (NYSE:MA) and Visa (NYSE:V). The conglomerate exited its position in Wells Fargo in the first quarter.
C shares galloped $2.55, or 5.4%, to $50.01 early Tuesday.
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