Citigroup  Inc (NYSE:C)'s shares rose nearly 5% in premarket trading after a new $3 billion bet by billionaire investor Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc boosted confidence in the battered Wall Street lender's stock.

Berkshire bought nearly $3 billion in Citigroup in the quarter ended March 31, taking advantage of a 5% pullback in shares following a slide in U.S. banks on fears of slowing economic growth.

Citi is undergoing an overhaul led by Chief Executive Officer Jane Fraser as it lags the financial performance of its peers. The bank is also working to fix its risk and compliance systems after orders from U.S. banking regulators. 

Its shares have slumped 38% over the past 12 months, the most among major Wall Street banks. Bank of America Corp (NYSE:BAC), which counts Berkshire as its top holder, has dropped 18% in the last year.

Berkshire also exited its 33-year-old investment in  Wells Fargo  (NYSE:WFC) & Co and deployed its cash to build stakes in Ally Financial (NYSE:ALLY) Inc, chemicals and specialty materials company  Celanese  (NYSE:CE) Corp and drug distributor McKesson Corp (NYSE:MCK) among others, boosting their shares.

Investing in so-called value stocks - assets trading below their intrinsic value - has a broad following and Warren Buffett is a prominent proponent of this investment style.