The world still needs Goldman Sachs, even if Warren Buffett is betting on digibanks

WARREN Buffett, until last year a devoted shareholder of big US banks, has moved on to their challengers. Does that spell the end of his faith in the traditional financial sector?

This week, Berkshire Hathaway poured US$500 million into Brazil's Nubank - the fintech company's largest single investment - giving it a valuation of US$30 billion. Nubank is one of the world's biggest so-called neobanks, or all-digital lenders, with 40 million users in Latin America.

For decades, financial institutions were Mr Buffett's bread and butter, with stakes in lenders, insurers and credit-card companies. That changed last year, when Berkshire dumped 84 per cent of its holdings in Goldman Sachs Group - initially picked up during the global financial crisis - and pared its stakes in Wells Fargo & Co and JPMorgan Chase & Co.