The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bank capital: BofA sells CCB stake, takes Buffett’s cash

Buffett instils confidence but at what price?; Deals positive signs for bank capital-raising

Chief executive of Bank of America, Brian Moynihan, has been trying to pull the bank out of pending capital woes by selling assets and accepting an injection of money from Warren Buffett. In the second half of August, Bank of America announced a $5 billion cash injection from Buffett’s firm, Berkshire Hathaway, in return for preferred stock in the bank. That stock pays a 6% annual dividend. The deal also gives Buffett warrants to buy $5 billion of common stock, meaning he could end up owning 6.5% of the company.

White knight

Bank of America has posted losses in three of the past five quarters, including a $6.7 billion loss in the first half of 2011, and has been losing investor confidence. On the day of the news of the cash injection, the bank’s stock rose 10%. Glenn Schorr, analyst at Nomura, referred to Buffett as Bank of America’s "white knight".

In his report following the announcement, Schorr said: "The injection of $5 billion from Buffett should dampen the heightened volatility in recent trading of BAC stock and its CDS, and we think it is a clear vote of confidence for the stability of Bank of America’s franchise."

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree