Truist Financial Sells $5.5 Billion Auto Loan Portfolio to Apollo, Exits Near-Prime Lending Unit

Truist Financial announced the sale of $5.5 billion in near-prime auto loans to Apollo Global Management, representing substantially all assets of its Regional Acceptance Corporation subsidiary, with closing expected in late third quarter or early fourth quarter of 2026. The transaction is one of the first strategic moves by new CEO Mike Lyons to sharpen the bank's business mix and exit non-core lending segments, following earlier exits from Marine and RV lending.

The deal is expected to generate $5.2 billion in net proceeds and release $535 million from loan-loss reserves, while creating approximately $945 million, or 22 basis points, of CET1 capital. The sale will also reduce non-performing loans by more than 10 basis points as of June 30, 2026, and cut net charge-offs by roughly 10 basis points annually. RAC's pre-tax earnings were approximately breakeven through the first half of 2026, underscoring the strategic rather than financial rationale for the exit.

CFO Mike Maguire, speaking at an investor conference, confirmed that Truist's third-quarter and full-year 2026 outlook remain unchanged, excluding the impact of these strategic actions. The bank plans to repay wholesale borrowings with the sale proceeds and reposition certain available-for-sale securities to fully offset capital generated by the transaction, with the combined moves expected to create modest earnings and return-on-tangible-common-equity accretion in 2027.

Separately, Truist analyst Keith Lerner said at a CNBC segment that continued choppiness in equity markets favors technology stocks, while Truist's equities desk also downgraded Meritage Homes to Hold from Buy with a $72 price target, citing expectations that the homebuilder will need to increase buyer incentives in a high mortgage rate environment. Truist maintained its Buy rating on James Hardie, citing cost synergies, and reiterated its rating on Salesforce following AI-focused announcements at the company's Dreamforce conference.