Truist Offloads Auto Loans: Bank to Sell $5.5 Billion Portfolio Amid Strategic Overhaul
Truist offloads auto loans in a major strategic move as Truist Financial prepares to sell approximately $5.5 billion in auto loans and exit the near-prime auto lending business. The Charlotte, North Carolina-based bank announced the transaction on September 15, 2026, as new CEO Mike Lyons pushes a broader review of businesses considered less strategic or less profitable.
The portfolio represents substantially all of the assets of Truist’s Regional Acceptance Corporation, its national auto-finance subsidiary. The transaction is expected to generate approximately $5.2 billion in net proceeds and allow Truist to recapture about $535 million in loan-loss reserves.
The sale is expected to close in late September or during the fourth quarter of 2026, subject to customary closing conditions.
Truist Offloads Auto Loans as It Exits Near-Prime Lending
The decision to sell the portfolio marks Truist’s exit from near-prime auto lending.
Near-prime borrowers generally fall between traditional prime borrowers and higher-risk subprime customers. Auto lenders serving this segment can potentially earn higher yields, but the business can also carry greater credit risk.
For Truist, Regional Acceptance Corporation had become less aligned with the bank’s broader strategy. Company executives have described the business as largely a loan-only platform, limiting opportunities to develop deeper relationships with customers through deposits, payments, commercial services or other banking products.
The sale therefore represents more than a single portfolio transaction. It is part of a wider effort to concentrate Truist’s resources on businesses that management considers more strategically important.
$5.5 Billion Auto Loan Portfolio Deal
The transaction involves approximately $5.5 billion of auto loans held by Regional Acceptance Corporation.
Truist expects the sale to produce:
- Approximately $5.2 billion in net proceeds
- About $535 million in loan-loss-reserve recapture
- Approximately $945 million in common equity Tier 1 capital creation
- A reduction of more than 10 basis points in non-performing loans
- Approximately 10 basis points of annual reduction in net charge-offs
The buyer of the portfolio has not been publicly disclosed. The transaction is expected to close by the end of 2026.
The capital generated by the transaction is also an important part of Truist’s strategy as the bank works to improve its balance sheet and funding profile.
Truist Plans to Use Proceeds to Repay Borrowings
Truist said proceeds from the sale will primarily be used to repay wholesale borrowings.
That move could strengthen the bank’s funding position while reducing its exposure to a lending business that management has determined is no longer central to its long-term strategy.
The transaction is also being paired with a repositioning of parts of Truist’s available-for-sale securities portfolio to manage the capital impact of the transaction.
The bank has said that the sale is expected to create approximately $945 million of common equity Tier 1 capital, equivalent to roughly 22 basis points.
Why Is Truist Selling the Auto Loan Portfolio?
Truist’s decision is connected to a broader strategic review under new CEO Mike Lyons.
Management has been evaluating the bank’s different businesses based on their profitability, strategic importance and ability to create broader customer relationships.
During the second quarter, Truist discontinued marine and recreational vehicle lending and significantly reduced originations in several consumer lending categories, including prime and non-prime auto loans.
The Regional Acceptance transaction takes that strategy a step further by removing substantially the entire auto-finance subsidiary from Truist’s balance sheet.
Chief Financial Officer Mike Maguire said the strategic review has gained additional urgency under Lyons’ leadership.
Regional Acceptance Had Been Operating Around Breakeven
One factor behind the decision is the financial performance of Regional Acceptance.
Truist said the business generated approximately breakeven pretax earnings during the first half of 2026.
That performance is significant because a large lending portfolio requires capital, funding and credit-risk management.
If the business is not generating returns that meet a bank’s long-term objectives, management may choose to redeploy that capital toward other businesses.
Truist has indicated that the Regional Acceptance sale fits into this broader approach.
Credit Quality Is Another Consideration
The transaction is also expected to improve Truist’s credit profile.
The bank said the sale should reduce non-performing loans by more than 10 basis points based on its June 30 balance sheet. Annual net charge-offs are also expected to decline by approximately 10 basis points.
American Banker reported that Truist’s non-performing indirect auto loans reached $569 million during the second quarter, representing roughly one-third of the bank’s total non-accruing assets.
This does not mean that all auto loans are problematic. Rather, the figures help explain why management is reassessing the risk and profitability of the segment as part of its broader portfolio review.
Elevated Borrowing Costs Add to the Auto Lending Challenge
The sale comes during a period when borrowing costs have remained relatively elevated.
Higher financing costs can influence consumer demand for vehicles because monthly payments become more expensive. They can also affect borrowers’ ability to qualify for loans and influence the economics of auto financing.
The impact is particularly relevant to near-prime borrowers, who generally have less favorable credit profiles and may already face higher borrowing costs than prime customers.
However, Truist has described the decision primarily as a strategic portfolio shift rather than simply a response to higher interest rates. The bank’s broader review is focused on profitability, strategic fit and capital efficiency.
What the Sale Means for Auto Borrowers
The sale does not necessarily mean that existing borrowers will suddenly lose their auto loans.
Instead, ownership of the loan portfolio is expected to transfer to the undisclosed buyer once the transaction closes.
The servicing arrangements and communications with borrowers could therefore change depending on the final structure of the transaction.
The impact on individual customers will depend on how the acquiring institution manages the portfolio and whether servicing responsibilities remain with Truist or are transferred.
Until the buyer and final servicing arrangements are announced, details for individual borrowers remain limited.
Truist Has Already Reduced Other Consumer Lending
The $5.5 billion transaction follows several other changes in Truist’s consumer lending operations.
During the second quarter, the bank stopped originating marine and recreational vehicle loans. It also reduced lending activity in selected prime and non-prime auto categories.
These moves indicate that Truist is attempting to reduce exposure to businesses that do not fit its current strategic priorities.
The bank has instead indicated that it wants to focus more heavily on relationship-based businesses where customers can use multiple financial products.
Broader Strategic Review Could Lead to More Changes
The auto loan sale is only one part of Truist’s wider strategic review.
Company executives have indicated that management is evaluating additional businesses and portfolios based on profitability and strategic fit.
Reuters reported that RBC analyst Gerard Cassidy expects further divestitures could occur as Lyons works to reposition Truist for stronger growth and profitability over the next several years. That is an analyst assessment rather than a confirmed list of future transactions from Truist.
Truist has not announced every potential action that could emerge from the review.
What the $5.2 Billion Proceeds Could Mean
The expected $5.2 billion in net proceeds gives Truist additional flexibility.
The bank plans to use the proceeds to repay wholesale borrowings, while also managing its securities portfolio and capital position.
The transaction is also expected to be modestly accretive to earnings and return on tangible common equity in 2027, according to Truist.
That means the financial impact is expected to extend beyond the immediate sale proceeds.
What Happens Next?
The transaction is expected to close in late third quarter or early fourth quarter of 2026, subject to customary conditions.
The main developments to watch include:
- Completion of the $5.5 billion portfolio sale
- Identification of the buyer
- Transfer and servicing arrangements for borrowers
- Truist’s use of the sale proceeds
- Changes in the bank’s credit metrics
- Further decisions from Truist’s strategic review
- Future changes to consumer lending operations
The outcome will help determine how significantly Truist’s balance sheet and business mix change following the transaction.
Looking Ahead
The decision to Truist offloads auto loans marks a significant shift in the bank’s consumer lending strategy. By selling approximately $5.5 billion in auto loans, Truist is exiting the near-prime auto lending market and freeing up capital that can be directed toward other areas of its business.
The transaction is expected to provide $5.2 billion in net proceeds, recapture $535 million in loan-loss reserves and create approximately $945 million in common equity Tier 1 capital. It is also expected to reduce non-performing loans and annual net charge-offs.
For Truist, the deal is part of a broader effort to focus on businesses that fit its long-term strategy. For the U.S. auto lending market, the transaction highlights how major financial institutions are reassessing lending portfolios amid changing credit conditions, funding costs and profitability requirements.
FAQs
1. Why is Truist selling $5.5 billion in auto loans?
Truist is exiting the near-prime auto lending business as part of a broader strategic review focused on businesses that are more strategic and meet its profitability objectives.
2. How much will Truist receive from the auto loan sale?
Truist expects the transaction to generate approximately $5.2 billion in net proceeds.
3. What is Regional Acceptance Corporation?
Regional Acceptance Corporation is Truist’s national auto-finance subsidiary and holds substantially all of the auto loans involved in the transaction.
4. Is Truist completely leaving auto lending?
The transaction represents Truist’s exit from near-prime auto lending through Regional Acceptance. The bank had also reduced originations in other prime and non-prime auto categories.
5. Who is buying the Truist auto loans?
Truist has not publicly disclosed the buyer of the approximately $5.5 billion portfolio.
6. When will the Truist auto loan sale close?
The transaction is expected to close in late third quarter or early fourth quarter of 2026, subject to customary closing conditions.
7. What will Truist do with the sale proceeds?
Truist plans to use the proceeds primarily to repay wholesale borrowings and improve its funding profile.
8. Will existing Truist auto borrowers be affected?
Existing borrowers may eventually receive information about changes to loan ownership or servicing after the transaction closes. Specific arrangements will depend on the buyer and final transaction structure.
9. How much capital could Truist generate from the transaction?
Truist expects the sale to create approximately $945 million in common equity Tier 1 capital, or about 22 basis points.
10. Is Truist planning more business changes?
Truist is conducting a broader strategic review, and executives have indicated that the bank is evaluating businesses and portfolios based on strategic fit and profitability. Further changes have not been fully disclosed.
