Shares of Wells Fargo rose 15.8 percent on Monday after billionaire investor Warren Buffett made positive comments about the California-based bank.
Buffett said in an interview with CNBC that the bank would come out “better than ever” from the current economic crisis. He said the company’s “prospects three years out have been better than ever.”
He said the bank is benefiting from low interest rates by borrowing funds at a low cost. Buffett’s Berkshire Hathaway Holding company own 7.2 percent of the bank.
The bank said on Friday that it would cut its stock dividend by 85 percent to retain an additional $5 billion in common equity this year as a precaution about possible worsening in the credit cycle.
Wells Fargo reported a loss of $2.73 billion in the fourth quarter, it’s first quarterly loss in seven years.