Banks are a big part of Berkshire Hathaway's portfolio, which is worth more than $248 billion.
"Banking is a good business if you don't do dumb things on the asset side, I mean, basically," Buffett said. "The banks we own earn between ... 12% and 16% or so on net tangible assets. That's a good business, that's a fantastic business against the long-term bond at 2%."
Buffett highlighted banks buying back stock as a top reason for why he likes the sector. For example, Bank of America "is buying in a lot of stock every year," Buffett said, "so our ownership of Bank of America this year will probably go up 7 or 8% without us spending a dime."
"I'd like to own any business, any good business, where my ownership just goes up 7 or 8% every year without me spending any money and, on top of it, I get a dividend," the Berkshire chairman and CEO added in the interview from the conglomerate's headquarters in Omaha, Nebraska.
— CNBC's Fred Imbert contributed to this report.
Correction: An earlier version misstated Buffett's title. He is chairman and CEO of Berkshire Hathaway.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.