Bank of America Corp (NYSE:BAC) CEO Brian Moynihan praised Warren Buffett on Tuesday as an investor in the company, but said he has not asked the legendary investor why he has lowered his position in Bank of America.
"He has been a great investor for our company, stabilized our company," Moynihan said about Buffett during an investor conference in New York, Reuters reported. "I don't know what exactly he is doing because frankly we can't ask."
Buffett's Berkshire Hathaway (NYSE:BRK) the biggest shareholder in BofA, has been reducing its stake in the U.S. bank, making total share sales since mid-July of nearly $7 billion.
Berkshire's stake in Bank of America stands at about 11.1%, according to LSEG data.
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Moynihan also discussed the proposed changes in capital rules after the Federal Reserve Chairman Jerome Powell laid out a plan on Tuesday to raise big bank capital by 9%, significantly reducing an earlier proposal after intense Wall Street pushback.
Moynihan said the proposed changes are manageable for Bank of America, and it will keep buying back stock, but warned that higher capital requirements for large banks could reduce lending.
"If our capital goes up by 10%, it stops us from making $160 billion (in) loans we would otherwise make. Those loans would go to small businesses and middle-market companies at competitive rates," he said.
Speaking about performance in the third quarter, he said investment banking revenue could be around $1.2 billion, a slight uptick from $1.18 billion in revenue posted in the same quarter a year earlier.
BAC Price Action: Bank of America fell 0.48% to close at $39.28 on Tuesday.
Exchange-traded funds that hold the stock also trended downward.
- First Trust Nasdaq Bank ETF (NASDAQ:FTXO) fell 1.71%
- Invesco KBW Bank ETF (NASDAQ:KBWB) slipped 1.83%
- IShares U.S. Financial Services ETF (NYSE:IYG) declined 1.11%
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Photo: Brian Moynihan, Bank of America at World Economic Forum (WEF), Courtesy WEF via Flickr Creative Commons