By Erik Holm and Andrew Frye
May 3 (Bloomberg) -- Billionaire Warren Buffett said losses at Citigroup Inc. have distorted the public perception of U.S. banks and that lenders including Wells Fargo & Co. are better able to withstand the recession.
“Wells Fargo has a dramatically different business model,” Buffett said at a press conference in Omaha, Nebraska, one day after Berkshire had its annual shareholders meeting.
Buffett has used the weekend events to tout the long-term prospects of his derivative bets and stock investments that soured in the recession. He said yesterday that Wells Fargo, the bank that’s the second-largest holding in Berkshire’s portfolio, will prosper regardless of the results of a federal stress test of top lenders.
Wells Fargo declined 33 percent this year on the New York Stock Exchange on concern the bank will take losses on loans acquired with the purchase of Wachovia Corp. Berkshire held about 290 million shares of San Francisco-based Wells Fargo as of Dec. 31. Based on the May 1 stock price, the stake is valued at about $5.7 billion. The bank slashed its dividend 85 percent in March, reducing investment income for Berkshire.
Citigroup has plunged 56 percent this year. Stephen Cohen, a spokesman for the New York-based bank, declined to comment.
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