Truist Exits Near-Prime Auto Lending, Sells $5.5 Billion in Loans
Truist Financial Corporation (TFC) is exiting the near-prime auto lending business by selling a $5.5 billion loan portfolio held through its subsidiary, Regional Acceptance Corp. The sale will generate approximately $5.2 billion in net proceeds and include a $535 million recapture of loan loss reserves. Expected to close late in Q3 or early in Q4 2026, the transaction is part of Truist's broader strategic review aimed at focusing on core business segments that align with its profitability goals. The move follows recent actions by Truist to divest noncore assets and reduce originations in less profitable lending areas such as marine and recreational vehicle loans. The sale will add $945 million of common equity tier 1 capital, which the bank plans to use for balance sheet strengthening and credit risk improvement. CFO Mike Maguire emphasized that while RAC was break-even, it did not contribute significantly to long-term profitability or client relationships beyond a single loan product. With new CEO Mike Lyons at the helm, Truist is accelerating its strategic evaluation with an aim toward profitable growth through core deposit expansion and asset development in areas where the bank can leverage existing strengths. Maguire indicated that further divestitures may occur as part of this strategy.
Tickers: $TFC
Topics: auto lending capital generation loan portfolio sale strategic review