Billionaire investor Warren Buffett told CNBC on Monday that Wells Fargo was slow to stop bad behavior in its ranks, but it's an overall good business.

"They made one mistake," Buffett said in a "Squawk Box" interview. "Incentives work. And they came up with improper incentives and they worked. And so, they [incentivized] bad behavior instead of [incentivizing] good behavior. And that happens from time to time."

Wells Fargo's stock was up 1 percent in premarket trading.

Wells admitted that as many as 3.5 million accounts were created for customers without their permission. That's nearly 70 percent more than originally thought. The scandal led to the departure of multiple executives, including former CEO John Stumpf.

The bank said Friday that it settled a class action securities fraud lawsuit for $480 million. Wells denied claims in the suit and that it settled to avoid further cost and disruption.