Stock Groups

Citigroup shares jump 5% after Warren Buffett reveals a near $3 billion stake in the struggling bank

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Warren Buffett is Chairman and CEO of Berkshire Hathaway

Andrew Harnik | AP

Citi shares were being underperformed by the rest of financial industry in the last 12 months, so the 91-year old “Oracle of Omaha”, scooped them up. While the stock has dropped nearly 40%, the Financial Select Sector SPDR Fund was down by 12%.

Citi welcomed Jane Fraser as its new CEO a year ago, the first female chief of a major U.S. bank. Her medium-term goal is 11% to 12% for the return on tangible equity. This will allow her to rebuild a bank that has been terribly underperforming over years.

Fraser decided to leave less profitable parts of the global firm’s empire. leaving 13 retail markets across Asia and Europe.

Citi is now part of Buffett’s rivals. Berkshire had $41.6 billion in assets Bank of AmericaAt the close of March, it was second in holdings to Apple. Bank of American is owned by Berkshire since 2017.

Berkshire purchased a new $390 million stake. Ally Financial. Following the disclosure, premarket trading on Tuesday saw an increase of 4%.

Additionally, the conglomerate held shares in Bank of NY Mellon, U.S. Bancorp, MastercardAnd Visa.In the first quarter, Wells Fargo was sold by the conglomerate.

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