Truist Financial in Charlotte, N.C., has agreed to sell the remaining stake in its insurance business.
The $535 billion-asset company said in a press release that it will receive $10.1 billion of after-tax cash proceeds from selling an 80% stake in Truist Insurance Holdings to a group led by Stone Point Capital and Clayton, Dubilier & Rice. Mubadala Investment Co. and other investors are involved.
The sale is expected to increase Truist’s Dec. 31 CET1 capital ratio by 230 basis points and increase its tangible book value per share by $7.12, or 33%.
Truist had already sold a 20% stake in the insurance unit for nearly $2 billion in cash to a group of funds managed by Stone Point. Mubadala also participated in that transaction.
Truist said the sale and reinvesting of the proceeds into cash yielding 4.5% should dilute 2024 earnings per share by 20 cents. The company said it will evaluate a variety of ways to deploy the capital, including a potential balance sheet repositioning.
The sale “will further strengthen our balance sheet, afford us the ability to maintain our earnings profile, and create significant ongoing flexibility to invest in our core banking franchise,” Bill Rogers, Truist’s chairman and CEO, said in the release.
“We are incredibly proud of the success we’ve achieved together with TIH over the years and are excited to see how Stone Point and CD&R continue to build the business in its next chapter of growth,” Rogers added.
The deal is expected to close in the second quarter.