Truist Financial will sell its remaining stake in Truist Insurance Holdings, valued at $15.5 billion, to a group of private-equity firms, the bank announced Tuesday.

Stone Point Capital and Clayton, Dubilier & Rice lead the group of investors, which also includes Mubadala Investment Company and others.

The development confirms an October report that the bank was exploring a sale of its majority stake in its insurance unit to Stone Point and others and marks the sale of the nation’s fifth-largest insurance brokerage.

With the sale, Truist trains its focus more strongly on banking amid its ongoing $750 million cost-cutting plan, which has seen the sale of its investment management arm for $70 million and 72 branch closures which, according to the bank, will make room for more digital investments.

Truist CEO Bill Rogers said Tuesday the sale of TIH 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.”

The all-cash sale is expected to increase Truist’s common equity tier 1 capital ratio by 230 basis points. The sale of TIH and following reinvestment of $10.1 billion of anticipated cash proceeds are estimated to be $0.20 dilutive to 2024 earnings per share. 

Following the close of the all-cash deal, which is expected early in the second quarter, Truist will evaluate its capital deployment options, including a potential balance sheet repositioning with a goal of replacing TIH's earnings.

“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,” TIH CEO John Howard said in a prepared statement. “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.”

Stone Point already owns 20% of TIH, which it purchased one year ago for $1.95 billion.

The deal plays into industry trends in both banking and private equity.

“Insurance distributors like Truist Insurance Holdings have attracted broad and deep interest from private investors in recent years due to the strength of their cash flows, the relatively low-risk nature of their balance sheets and top-line momentum from strong property and casualty insurance pricing in what has traditionally been a fragmented market,” said Tim Zawacki, principal research analyst at S&P Global Market Intelligence. “While this transaction provides more evidence of the strength of that interest, I would view it as being more symbolic of the banking industry’s decade-long retreat from the financial supermarket model that sought to bring together lending, depository and insurance products and services under one roof.”