Truist Financial to sell $5.5 billion of auto loans amid overhaul  

By Reuters News

Sept 15 (Reuters) - Truist Financial TFC.N said on Tuesday it has struck a deal to sell $5.5 billion of auto loans, as CEO Mike Lyons pushes to overhaul the U.S. bank and exit less profitable, non-core businesses.

Here are some key details:

  • The sale is expected to generate $5.2 billion in net proceeds for Truist and mark its exit from near-prime auto lending.

  • The Charlotte, North Carolina-based bank also said a broad strategic review was ongoing.

  • "There's a lot of urgency and intensity that's been added to this evaluation that really started earlier this year," Truist finance chief Mike Maguire said at the Barclays Global Financial Services Conference on Tuesday.

  • During the second quarter, Truist discontinued marine and recreational vehicle loans and reduced originations in several other less profitable consumer lending units, such as prime and non-prime auto.

  • "In addition to implementing a more robust deposit gathering strategy, we also believe further divestitures are likely as Lyons repositions TFC for stronger growth and profitability over the next three years," RBC analyst Gerard Cassidy said.

  • Truist said it is pairing the transaction, which is expected to close this year, with a repositioning of its securities portfolio to offset the capital created from the loan sale.

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