Financial institution Truist reportedly in negotiations to offload the remaining portion of its insurance division for approximately $10 billion.

In a significant move that could reshape the U.S. banking landscape, Stone Point Capital is reportedly in discussions to buy the majority of Truist's insurance brokerage for approximately $10 billion.

The potential deal, if it comes to fruition, could involve both the commercial and retail sectors of Truist's insurance business. This development follows Stone Point's previous investment in Truist Insurance Holdings, where it purchased a 20% stake for $1.95 billion.

The talks are ongoing, and the details of the offer and the amount of debt Stone Point Capital may use to finance a purchase loan for the takeover remain undisclosed. Stone Point and Truist have both declined to comment on the matter, maintaining a veil of secrecy around the negotiations.

Truist, which has been grappling with a crisis of confidence affecting several U.S. regional banks, including Silvergate, Signature, First Republic, and Silicon Valley Bank, appears to be seeking strategic and financial flexibility. The sale of a significant portion of its insurance business is seen as a step towards this goal, according to Truist CEO Bill Rogers.

The insurance business contributes significantly to Truist's total revenue, fee income, and net income, accounting for 13%, 35%, and 8% respectively. The bank announced an effort to save $750 million in costs over the next 18 months, which could be facilitated by the sale.

Regulators, led by the Federal Reserve, are proposing new standards for capital requirements that could force banks with between $250 billion and $1 trillion in assets to hold roughly 10% more capital. If Truist offloads its insurance business, it could free up an additional 2 percentage points of capital.

Stone Point Capital's recent investment in TIAA's banking unit further underscores its strategic interest in the banking sector. The success of the potential deal may depend on Stone Point's ability to secure enough debt to power a buyout loan.

As of June 30, Truist's ratio of loss-absorbing capital to assets was 9.6%, indicating a robust financial position. Despite the ongoing negotiations, the future of Truist's insurance business remains uncertain, with the outcome of the talks yet to be determined.