Warren Buffett holds significant stakes in Bank of America and Ally Financial as he reduces bank stock investments

Warren Buffett has reduced his bank stock holdings but still maintains significant investments in Bank of America and Ally Financial. Bank of America represents a $34 billion stake, while Ally Financial is valued at over $1 billion. Bank of America is a large, profitable bank with a strong deposit base and stable charge-off rates. It has successfully created shareholder value through growth and stock buybacks, despite facing pressure on interest margins. Ally Financial, primarily an auto lender, has diversified into a full-service online bank. It offers higher yields on loans and could benefit from falling interest rates. However, it faces concerns over rising charge-offs, impacting its recent stock performance.