The sale of Truist Insurance Holdings (TIH) forms part of Truist’s efforts to further strengthen its balance sheet. Credit: rafapress/shutterstock.com.

Truist Financial has agreed to sell its remaining stake in TIH to an investor group led by Stone Point Capital and Clayton, Dubilier & Rice (CD&R).

This investor group also includes Mubadala Investment Company and other co-investors, with the transaction valuing TIH at $15.5bn.

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Truist Insurance is engaged in providing insurance brokerage services and risk management solutions.

The transaction is expected to bolster Truist’s balance sheet, increasing its CET1 capital ratio by 230 basis points and its tangible book value per share by $7.12, or 33%.

The company plans to explore various capital deployment strategies post-sale, aiming to offset the earnings lost due to the divestiture of TIH.

TIH chairman and CEO John Howard said: “Scale is critical to remain competitive in our rapidly changing industry, and through this partnership, we will benefit from Stone Point’s and CD&R’s expertise in financial services, proven track records of transformative value creation, and the significant capital support from two leading financial sponsors.

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“Together with our capital partners, we will remain focused on growth and look forward to the opportunity to strengthen our relationships with our clients and business partners – more than ever before.”

Truist’s board of directors has given unanimous consent to the all-cash deal.

The deal awaits regulatory approvals and is due to close in the second quarter of 2024.

Truist chairman and CEO Bill Rogers said: “We are pleased to have reached an agreement to sell TIH as it 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.

“We are incredibly proud of the success we have 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.”

In April 2023, Stone Point Capital acquired a 20% stake in Truist Insurance for $1.95bn, valuing the insurance subsidiary at around $14.75bn.