Truist Financial Corporation (TFC) is selling a $5.5 billion portfolio of auto loans as the bank continues a strategic overhaul aimed at moving away from businesses that generate lower returns. The Charlotte, North Carolina-based lender said Tuesday that the transaction is expected to produce approximately $5.2 billion in net proceeds and will take Truist out of the near-prime auto lending market.
The deal is expected to close before the end of 2026. Truist said it will also adjust its securities portfolio as part of the transaction to offset the capital generated by the loan sale. The asset sale comes as Chief Executive Officer Mike Lyons pushes ahead with a broader review of the bank's operations. Truist said that review remains underway.
The bank has already begun scaling back portions of its consumer lending business. During the second quarter, Truist stopped originating marine and recreational vehicle loans and reduced lending activity in several other consumer categories, including prime and non-prime auto loans.
Truist Chief Financial Officer (CFO) Mike Maguire said Tuesday that the strategic assessment has taken on greater urgency since the beginning of the year.
Analysts expect the bank could pursue additional asset sales as management focuses on improving profitability and redirecting resources toward businesses with stronger growth prospects. RBC analyst Gerard Cassidy also pointed to a greater emphasis on gathering deposits as part of the repositioning.