Warren Buffett is set to make $12 billion on a single trade

That's why I'm a billionaire and you're not

That's why I'm a billionaire and you're not

Warren Buffett's firm may soon become the biggest shareholder in Bank of America Corp.

Berkshire Hathaway released a statement saying it would convert its preferred shares to common stock on the Charlotte based bank increases its dividend, which is planned for the beginning of the third quarter. That means the common stock would yield $36 million more a year than $300 million annual dividend Buffett has received on the preferred stake. Additionally, it would net him a hefty profit of about $11.9 billion at Bank of America's stock price as of Wednesday's close: $24.

Warren Buffett's company will become the biggest shareholder in Bank of America Corp, after Berkshire Hathaway Inc on Friday invoked its right to acquire 700 million shares of the second-largest US bank.

Buffett's move underscores his confidence in Brian Moynihan, Bank of America's chief executive. That sweetened dividend will pay Buffett's 700,000 new shares about $336 million a year.

Brian Moynihan, Bank of America's chief executive, accepted Buffett's investment, when many investors anxious whether the lender would have enough capital.

Perhaps even more significant from a general shareholder's point of view, Bank of America also announced that its already-generous buyback program would be more than doubled for 2017.

While Omaha, Neb. -based Berkshire (BRK.A), still holds shares of AmEx, Coke and IBM, they would be bumped from the top four spots by Apple Inc.

Mr. Buffett, Berkshire's chairman and CEO, amassed stakes in a number of lenders and financial-services companies, sometimes at cut-rate prices around the financial crisis. This is the second year in a row that Bank of America has gotten permission to increase both its dividend and buybacks.

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