Buffett Also Dumped JPMorgan, Bank of New York Mellon, U.S. Bank, And Goldman Sachs But Bought Citi

Wells Fargo is not the only bank position Buffett has been unwinding. In Q3 2022 he trimmed longstanding positions in the venerable Bank of New York Mellon (BK) and U.S. Bank (USB). He had earlier purged Berkshire's portfolio of JP Morgan and Goldman Sachs (GS). Why? The following are some possible reasons:

• Both Bank of New York and US Bank were steady dividend payers in an era when a 3-4% dividend was very helpful. He first bought USB in 2006 and tripled his holding over the years of the financial crisis when it became clear that they were doing fine. In 2012 he added BK, a go-nowhere custodial bank, as Treasury rates remained stuck near zero. He can now do better things with cash.
• As WFC faded, Buffett built up an $8 billion position in JPM in 2019. He sold it all in 2020, perhaps realizing that its imperial merchant banking style was not what he was really after - lots of investment banking, not a lot of buybacks.
• Ditto Goldman. He acquired it in a $5 billion bailout in 2008, eventually converting his position into shares, and sold steadily through 2020. Goldman's foray into consumer banking was failing and losing money, and Buffett had come to despise investment banking (although he had used Goldman in the past), docking Alleghany for the money they spent on GS as investment banker while shopping his buyout offer. Investment banking is currently weak, and Goldman doesn't have much else to fall back on. They better hope that Buffett's view doesn't catch on.
• What's the rationale for Citi (C)? First, I'm not sure if the buyer was Buffett himself or one of "the boys." It's small enough for the latter. Bought in Q1 2022 it was dirt cheap, pays a good dividend, and has a history of getting every major issue wrong for roughly fifty years. Short answer: dirt cheap.