'Plenty Profitable'
Banking can "still be plenty profitable," Buffett told Bloomberg Television's Betty Liu on the "In the Loop" program on July 8.
The cost to protect against a default by Bank of America plunged. Credit-default swaps on the bank, which surged to a record this week, dropped 65 basis points to 308 basis points as of 10:43 a.m. in New York, according to data provider CMA.
Bank of America's trading floor in New York erupted in cheers and applause when the news was announced this morning, said a person at the company who witnessed the reaction but who wasn't authorized to speak publicly.
Moynihan agreed to sell the bank's Canadian card unit, with about $8.6 billion in loan balances, and plans to leave the U.K. and Irish card markets, Bank of America said this month. The bank has been forced to write down credit-card and mortgage units acquired by Moynihan's predecessor, Kenneth D. Lewis. Bank of America has sold more than 20 assets or units since Moynihan took over last year.
Job Cuts
The bank will eliminate about 3,500 jobs this quarter to focus "on what we can control" amid market turmoil, Moynihan said last week. Some workers already were informed of the dismissals, which are in addition to 2,500 reductions made this year, Moynihan said in a memo to senior managers.
Berkshire sold a stake in Bank of America last year and Buffett has publicly criticized Lewis, for missteps including the purchase of Merrill Lynch & Co., a deal struck the same day Lehman Brothers Holdings Inc. filed for bankruptcy in 2008.
Lewis "paid a crazy price, in my view," Buffett said in remarks released Feb. 10 by the Financial Crisis Inquiry Commission. "He could have bought them the next day for nothing." Moynihan became CEO early last year.
While the company suffered from errors, its reach among consumers are a source of strength, Buffett told CNBC in 2009.