Truist Financial (TFC) Barclays 24th Annual Global Financial Services Conference summary

Strategic initiatives and portfolio repositioning

• Announced sale of $5.5 billion in near-prime auto loans, exiting the Regional Acceptance Corp business, aligning with recent moves to cease marine/RV and de-emphasize national auto lending.

• Transaction is expected to modestly improve EPS, ROTCE, and tangible book value per share, while reducing non-performing loans and charge-offs by about 20%.

• Proceeds will be used to reduce borrowings and improve funding profile, with a securities portfolio repositioning to offset capital impacts.

• New CEO is driving a strategic review, focusing on businesses aligned with core strengths and profitability, with further portfolio optimization underway.

• Emphasis on disciplined capital allocation and expense management, with no sacred cows in the portfolio review.

Financial outlook and performance

• Affirmed quarterly and annual outlook, excluding impacts from the auto loan sale; guidance for 1.5% NII growth in Q3 and 1–1.5% for the year remains unchanged.

• Net interest margin expected to modestly improve in the second half, with the auto loan sale diluting NIM by 4–5 basis points but improving earnings and credit quality.

• Fee income is a bright spot, with nearly 10% growth expected for the year, driven by banking, trading, wealth, and payments businesses.

• Commitment to a $5 billion buyback for the year, targeting a 10% CET1 ratio by end of next year, and preparing for Basel-driven capital changes in 2028.

• ROTCE target of 16–18% remains in place, with focus on capital-efficient revenue growth and productivity improvements.

Market environment and growth opportunities

• Credit conditions remain benign, with no significant stress observed among consumer or commercial clients; vigilance maintained due to geopolitical and rate uncertainties.

• Commercial, middle market, and select CRE lending are seen as growth areas, with renewed focus on relationship-driven products like credit cards, HELOCs, and retail mortgages.

• Deposit growth is strong, especially in wholesale, with increased rate sensitivity among clients; focus on defending and expanding core deposit relationships.

• Branch renovation and de novo expansion programs are underway, with potential acceleration under new leadership.

• Structural opportunities identified in the securities and HTM portfolios, with ongoing automation and AI-driven productivity gains.