Banks are a big part of Berkshire Hathaway’s portfolio, which is worth more than $248 billion.
“Banking is a good business if you don’t do dumb things on the asset side, I mean, basically,” Buffett said. “The banks we own earn between … 12% and 16% or so on net tangible assets. That’s a good business, that’s a fantastic business against the long-term bond at 2%.”
Buffett highlighted banks buying back stock as a top reason for why he likes the sector. For example, Bank of America “is buying in a lot of stock every year,” Buffett said, “so our ownership of Bank of America this year will probably go up 7 or 8% without us spending a dime.”
“I’d like to own any business, any good business, where my ownership just goes up 7 or 8% every year without me spending any money and, on top of it, I get a dividend,” the Berkshire chairman and CEO added in the interview from the conglomerate’s headquarters in Omaha, Nebraska.
— CNBC’s Fred Imbert contributed to this report.
Correction: An earlier version misstated Buffett’s title. He is chairman and CEO of Berkshire Hathaway.
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